Question

If a U.S. firm's expenses are more susceptible to exchange rate movements than revenue, the firm will ____ if the dollar ____. a. benefit; weakens b. be unaffected; weakens c. be unaffected; strengthens d. benefit; strengthe

Answer 1

d. benefit; strengthens

Explanation: Exchange rate is a term used in the currency market or in an economy to describe the value of a given currency against another currency, the exchange rate is usually used in most cases against a generally accepted reference currency such as the United States of America Dollar. WHEN THE EXCHANGE RATE OF A CURRENCY INCREASES(STRENTHENS) THE VALUE OF THE CURRENCY INCREASES WHICH HELPS THE USERS OF THE CURRENCY TO BENEFIT FROM THE INCREASED VALUE.