Impact of Exchange Rate Fluctuations
Strong dollar
? US exports become expensive and decrease
? US imports become cheaper and increase
Weak dollar
? US exports become cheaper and increase
? US imports become expensive and decrease
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What is an indifference curve? Why can indifference curves never cross?
What will be an ideal response?
On December 29th, the cost of a skiing trip to Finse, Norway, was 6,500 krone. Two weeks later, the American dollar appreciated against the Norwegian krone. If the price of the trip in Norway remains the same, _____
a. an American skier living in Florida will now view this trip as cheaper compared to before b. an American skier living in Florida will now view this trip as highly expensive compared to before c. an American skier living in Florida will now view this trip as of the same value as before d. an American skier living in Florida will now value this trip less as compared to before e. an American skier living in Florida will no longer take this trip