lectur2-page2 - themselves from foreign currency...

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Rather than go after increased market share, the U.S. auto-makers increased the prices of their vehicles as the dollar was “weakened” by the government intervention. Auto industry profits soared, stock prices increased. The American consumer, the same consumer that was yelling, “Buy American” ended up paying more for Japanese and American automobiles as a result of this government action. When all was said and done, U.S. auto-makers had not gained any significant gains in market share. The Japanese responded with rebates and low interest financing; and accelerated the building of production facilities in this country to insulate and accelerated the building of production facilities in this country to insulate
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Unformatted text preview: themselves from foreign currency fluctuations. Agriculture generally benefits from a “weak” U.S. dollar. When the dollar is “weak”, American commodities are cheaper for foreign countries to purchase. Corn, wheat, and soybean exports generally increase as the dollar weakens. These exports remove a portion of the crop from U.S. markets which generally results in an increase in the price that a farmer receives for his crop sold in the U.S. But remember, a “weak” dollar makes imports from other countries more expensive to consumers and can help fuel inflation. Why understand economics? 2...
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This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.

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