d. One of the distinguishing features of international finance is exchange rate. Would you prefer a...

d. One of the distinguishing features of international finance is exchange rate. Would you prefer a weaker U.S. dollar or a strong U.S. dollar?

100 words or less

Expert Solution

There are pros and cons to both scenarios. A weaker US dollar helps exports by US firms because their products and services would be cheaper in the global markets. However, a weaker US dollar also means that consumers needs to pay more dollars all goods imported into the US. The US imports almost $2.4 trillion worth of goods each year. If the dollar is weak, you need to pay more dollars for the same quantity of goods.

On the other hand, if the US dollar is strong, you need to pay less dollars for getting imports into the country. However, the US exports are likely to get a hit because the cost of their products and services would be expensive for foreign consumers. US exports $1.6 trillion worth of goods and services last year, which would decline if the US dollar is stronger.

Finding the right value of exchange rate is a very difficult task and the government has to evaluate both the pros and cons of the decision. Given the current environment, US government seems to favor a weaker dollar to incentivize US exporters.

jeff jeffy answered 3 months ago

Introduction to international finance. Why would one select this concept of International finance for further examination?...

Introduction to international finance. Why would one select this concept of International finance for further examination? Why is it an important aspect of financial management? Respond to the following two posts, Below are two participant response you must respond back Lisa, I believe international finance is important because it’s part of our financial economics. When looking at international finance you are also thinking about exchange rates of currency, the different monetary systems in the world, foreign direct investments, foreign markets...

International Finance (10) Assume that the current exchange rate is $40 =£ What value for the...

International Finance (10) Assume that the current exchange rate is $40 =£ What value for the exchange rate (provide a specific number – change the $ value but leave the£value at 1) would mean a stronger dollar? What value would mean a weaker dollar? Who gains and who loses from a weak or a strong dollar and why? Is it better for a country to have a weak or a strong dollar?

Compare and contrast (this means that you need to explain both shared features and distinguishing features...

Compare and contrast (this means that you need to explain both shared features and distinguishing features in the pair) seeds and spores. You also need to include at least ONE specific phylum for each term. For example: microgametophyte and megagametophyte: These terms refer to organisms found in the 4 phyla of the Gymnosperms and the Anthophyta in the plant Kingdom. The microgametophyte is contained within the pollen grain and contains the sperm and the megagametophyte contains the egg and is...

9) Based on the premise that, other things equal, countries would prefer a fixed exchange rate,...

9) Based on the premise that, other things equal, countries would prefer a fixed exchange rate, which of the following statements is NOT true? A) Fixed rates provide stability in international prices for the conduct of trade. B) Fixed exchange rate regimes necessitate that central banks maintain large quantities of international reserves for use in the occasional defense of the fixed rate. C) Fixed rates are inherently inflationary in that they require the country to follow loose monetary and fiscal...

Question 1. What is effect of international finance in changing in interest rate towards exchange currencies...

Question 1. What is effect of international finance in changing in interest rate towards exchange currencies value? Please ellaborate the answer with some details. Thanks.

1. in international finance, what is exchange rate definition in general sense? explain the three types...

1. in international finance, what is exchange rate definition in general sense? explain the three types of foreign exchange exposure ?

If the interest rate is 6%, which of these investments would you prefer?

If the interest rate is 6%, which of these investments would you prefer? A single payment of $500 in year 3 A payment of $40 a year for 20 years starting in one year's time A perpetuity of $30 a year starting in one year's time A payment of $342.17 today

Of the following car financing options, which one would you prefer while assuming that you prefer...

Of the following car financing options, which one would you prefer while assuming that you prefer paying the least amount of dollars and that you face a 10% annual compound interest rate on all your financial decisions? A) A lump-sum payment of $20,000 in two years from today B) A payment of $10,000 today and another of $10,000 in one year from today C) A lump-sum payment of $19,000 today only D) A lump-sum payment of $20,000 today only (Please...

If you were contracting for a mortgage in Canada soon, would you prefer a fixed rate...

If you were contracting for a mortgage in Canada soon, would you prefer a fixed rate or a floating rate? If you were to choose the fixed rate what would be a good deal right now? Explain.

assume you decide to take a mortgage loan, would you prefer a fixed-rate mortgage or variable...

assume you decide to take a mortgage loan, would you prefer a fixed-rate mortgage or variable rate mortgage? why?

Question