Question

As a result of a decrease in the demand for U.S. dollars, there has been depreciation in the value of the U.S. dollar relative to Peruvian neuvo sol. The depreciation in the U.S. dollar has benefitted some groups but harmed others. Indicate which of the groups are winners and which are losers from the standpoint of the depreciation of the U.S. dollar. A. Todd, an American, goes to visit Peru for spring break. B. An investment bank in Peru is interested in purchasing U.S. government bonds. C. Goodyear, a firm based in the United States, sells car tires in Peru. D. A family from Peru visits relatives in the United States. E. A firm from Peru sells handbags in the United States. F. An electronics manufacturer based in the United States, purchases a high tech company in Peru.

Answer 1

Answer: See explanation

Step-by-step explanation:

A. Todd, an American, goes to visit Peru for spring break.

Todd is a loser. This is because more expenses will be incurred on the trip.

B. An investment bank in Peru is interested in purchasing U.S. government bonds.

The investment banker is a winner. This is because there's an appreciation of the currency on the part of the investment banker and therefore will be able to purchase more bonds.

C. Goodyear, a firm based in the United States, sells car tires in Peru.

Goodwill is a winner. This is because as an exporter, the company will make more profit as there'll be a rise in the export.

D. A family from Peru visits relatives in the United States.

They are winners as they'll get more dollars now.

E. A firm from Peru sells handbags in the United States.

This is a loser as less revenue will be made due to depreciation.

F. An electronics manufacturer based in the United States, purchases a high tech company in Peru.

This is a loser as well.