Question

A stronger euro benefits: A) U. S. exporters B) European consumers C) European exporters D) both (a) and (b) E) both (b) and (c).

Answer 1

Answer - (D) both (a) and (b) The euro is the sole currency of 19 you member states Euro accounts majority of member states and with the remainder operating independent monetary policies. Stronger Euro means buying buying power for European consumers this causes a rise in export by American companies to Europe which is among the largest consumer of American goods intern American companies see the revenue rice higher revenue signal good financial health to investors who is demand for share pushes up the value of stock the opposite can also happen a decline Euro Euro causes American companies to export less or Kut production resulting in slumping stocks a stronger Euro effects some us talk more than others American companies that don't provide many goods or services to European customers don't see the same revenue increase and rising stock prices as those that too. In March 2018 Euro reached its historical of Dollar 1. 5904 many analysts believe that if the current trend continues Euro will rise dollar 1.60 the strength of euro means that the rising price of imported raw materials have less impact on the economy is of eurozone on their inflation rates that's because prices of Petroleum Greens and metals are quoted in Dollars which translate into fewer euros on the other hand those companies that generate a large portion of their revenue oversee sees that the goods and services are more expensive at least in countries that use the dollar the appreciation of euro will have a significant impact on European companies according to one of the recent reports strong appreciation of euro versus the dollar that in the Europe businesses because according to the analysis a 10% rise in the euro can have impact of lowering exports by 1% and lowering GDP by 0.25% it is hard to establish a Priority specific figure in other words once economic activities slows down as a result of loss of competitiveness that stems from foreign exchange rates the recovery process in the real economy will be slow the sectors that will have damaged the most are those that because there very nature are not appropriate for direct investment and which are based on exportation or have a specific character type 2 Geography among those the traditional manufacturing centres in various offshoots along with the tourist industry