Question

A U.S. company that makes all of its goods at a plant in Brazil and then exports the Brazilian- made goods to those European markets where the currency is euros

A. stands to become more profitable (in terms of U.S. dollars) when the U.S. dollar appreciates in value against the Brazilian real.
B. is unaffected by changes in the valuation of the euro against the Brazilian real--all that matters to a U.S. company is the valuation of the U.S. dollar against the Brazilian real.
C. is competitively advantaged when the Brazilian real declines in value against the euro.
D. is competitively disadvantaged when the U.S. dollar declines in value against the Brazilian real.
E. becomes less cost competitive in selling its exported goods in euro-based European markets when the Brazilian real declines in value against the euro

Answer 1

A U.S. company is competitively advantaged when the Brazilian real declines in value against the euro.

Step-by-step explanation:

A U.S. company that makes all of its goods at a plant in Brazil and then exports the Brazilian-made goods to European markets where the currency is euros will be competitively advantaged when the Brazilian real declines in value against the euro (option C). When the Brazilian real declines in value against the euro, it means that the U.S. company can sell its exported goods at a lower price in euro-based European markets, making it more competitive.