Finance Revision.doc - Surname 1 Name Tutor Course Date Impact of a Strong Dollar to the US and Other Countries 1 Does a strong dollar(higher value

Finance Revision.doc - Surname 1 Name Tutor Course Date...

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Surname 1 Name Tutor Course Date Impact of a Strong Dollar to the US and Other Countries 1. Does a strong dollar (higher value versus other currencies) help or hurt U.S. exporters? Why? A strong dollar tends to hurt U.S exporters because it makes sales from other countries look more attractive. It may cause unhealthy competition from other countries, and there would be a decrease in the usual number of customers. Adjusting from this kind of situation may prove difficult. An increase in the value of the dollar means that the price of US products goes relatively higher in overseas markets thus causing a lot of problems. 2. Why is Avon unable to raise prices fast enough in Brazil to offset the dollar’s new strength? Time needed by Avon to raise prices is dependent on the one it takes to print brochures. Avon uses dollars to buy raw materials for selling in Europe, Africa, and the Middle East. Thus, if Avon increases its prices, it would be undercut by the local competitors who are not faced with the same factors.
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  • Fall '17
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