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 South Korean won. 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.

Answer 1

Todd, an American, goes to visit South Korea for spring break - loser

Tood is a loser due to the depreciation of the U.S. dollar, because now he will need more dollars to buy a comparative amount of South Korean wons. His trip will now be more expensive.

An investment bank in South Korea, interested in purchasing U.S. government bonds - winner

The investment bank will exchange less wons for U.S. dollars than before. Buying the government bonds will now be cheaper for them.

Goodyear, a firm based in the United States, sells car tires in South Korea - winner

Goodyear will likely sell more cars because for its South Korean customers, the cars are now cheaper, since the value of the dollar has depreciated against the currency that they hold.

A family from South Korea visits relatives in the United States - winner

The South Korean family will exchange less wons for more U.S. dollars, making their trip cheaper.

A firm from South Korea sells handbags in the United States - loser

The handbags will now be more expensive for their American customers, likely causing a loss in sales revenue for the firm.

An electronics manufacturer in the United States, purchases a high tech company in South Korea - loser

The cost of the high tech South Korean company is now higher for the American manufacturer, because more dollars had to be exchanged for wons before the purchase.

Step-by-step explanation: