if the u.s. dollar weakens, which of the following parties will benefit? course hero

How does Procter&Gamble benefit when the dollar is weak?

Question 22 1 pts If the U.S. dollar weakens , which of the following parties will lose ? Question 23 1 pts A stronger euro is more favorable for : Question 24 1 pts If 105 Japanese yen purchased $ 1.00 U.S. in 2008 and 123 Japanese yen purchased $ 1.00 U.S. in 2009 , then : Question 25 1 pts What term is used to describe the interest rate ...

Should the US trade in a weaker or a stronger currency?

Which of the following is an advantage of a weak U. S. dollar? Dollar prices of imported goods, senses, and raw material will be power U. S. exports will become more competitive in foreign markets. Costs of traveling abroad will be lower for U. S. tourists A weak U. S. economy will attract more foreign capital. Money has all the following functions

Is a weak dollar a good thing for shareholders?

The benefit of the current account deficit involves all of the following except: ... combined with no change in inflation in the U.S., will cause which of the following changes in the international value of the dollar and why (focus on the effects on U.S. imports)? ... An increase in the value of the dollar because U.S. imports would decrease.

How does tight monetary policy affect the dollar?

CONCEPT Open Market Operations 5 Determine which statement below regarding international trade is FALSE. Trade surplus occurs when exports exceed imports. An increase in imports will cause a rightward shift in AD. A recession in one country can have a negative effect on AD in another country. If the dollar is weak, people in other countries ...

What is a weak dollar?

The term weak dollar is used to describe a sustained period of time, as opposed to two or three days of price fluctuation. Much like the economy, the strength of a country's currency is cyclical, so extended periods of strength and weakness are inevitable.

What was the Fed doing in response to the Great Recession?

In response to the Great Recession, the Fed employed several quantitative easing programs where it purchased large sums of Treasuries and mortgage-backed-securities. In turn, the bond market rallied, which pushed interest rates in the U.S. to record lows. As interest rates fell, the U.S. dollar weakened substantially.

How does the Federal Reserve work?

The Federal Reserve works to equalize such influences as much as it determines to be prudent. The Fed responds with tight or easing monetary policy. During a period of tight monetary policy, when the Federal Reserve is raising interest rates, the U.S. dollar is likely to strengthen.

Who is Gordon Scott?

Gordon Scott has been an active investor and technical analyst of securities, futures, forex, and penny stocks for 20+ years. He is a member of the Investopedia Financial Review Board and the co-author of Investing to Win. Gordon is a Chartered Market Technician (CMT). He is also a member of ASTD, ISPI, STC, and MTA.

Is a weak dollar good?

Obviously, a weak dollar reduces pur chasing power for American consumers, and this may send them over to generic brands rather than higher-cost premium offerings produced by multinationals.

What happens when the dollar falls?

A falling dollar diminishes its purchasing power internationally, and that eventually translates to the consumer level. For example, a weak dollar increases the cost to import oil, causing oil prices to rise. This means a dollar buys less gas and that pinches many consumers. (To learn more about the impact of monetary fluctuations, ...

Who is Chip Stapleton?

Chip Stapleton is a Financial Analyst, Angel Investor, and former Financial Planner & Business Advisor of 7+ years. He currently holds a Series 7, and Series 66 licenses. Many investors believe that a decline in the value of the U.S. dollar is a bad thing, but the other side of the equation is that a weak dollar presents several profit ...

What are some examples of multinational companies?

Two of the best examples of U.S. multinationals are McDonald's (NYSE: MCD) and Procter & Gamble (NYSE: PG ). These two companies are among the biggest in the U.S. and the most recognizable on the global stage. McDonald's has unrivaled brand recognition and millions of homes across the world have at least one Procter & Gamble product.

When did InBev acquire Anheuser-Busch?

companies, as Anheuser-Busch, a true American multinational and one of the country's most venerable corporations, was acquired by InBev (OTCBB: AHBIF) in 2008 due in part to the euro's strength against the greenback.

Who is Todd Shriber?

Todd Shriber is the ETF editor at Benzinga. An ETF expert, he has been quoted by Barron's, CNBC.com, and The Wall Street Journal. Todd has a bachelor's degree in broadcast journalism from Texas Christian University. Learn about our editorial policies.

The Issue

U.S. political leaders from President Trump to Democratic presidential candidate Elizabeth Warren see the dollar’s current strength as a drag on the American economy. A strong dollar makes U.S. goods more expensive in foreign markets while at the same time making it more difficult for U.S. producers to compete with cheap imports.

The Facts

The U.S. dollar appreciated by 25 percent between July of 2011 and July 2019 (see chart). The value of the dollar has been rising over the past eight years, as measured by an index of the dollar’s real (or inflation-adjusted) exchange rate that measures the cost of U.S.

What this Means

The general reason the dollar has been strong recently is that the United States economy is growing rapidly relative to many major economies abroad, also leading the Federal Reserve to maintain a higher level of interest rates as a brake on inflation.

What happens when the dollar is weak?

businesses to import goods. These costs are passed on to the consumer. When this happens, prices on goods tend to rise.

What happens when other currencies are strong?

dollar, international firms will be able to purchase more products from the U.S. resulting in an increase in exports.

Why are foreign companies less likely to import from the United States?

Foreign businesses are less likely to import from the United States because they can trade more goods for their money with a different country that has a currency weaker than the dollar.

What Is A Weak Dollar?

Understanding What A Weak Dollar Means

Quantitative Easing

Tourism and Trade

• Depending on the type of transaction that a party is participating in, possessing a weak dollar is not necessarily a bad situation. For example, a weak dollar may be bad news for U.S. citizens wishing to vacation in foreign countries, but it could be good news for U.S. tourist attractions, as it also means that the U.S. would be more inviting as a ...

See more on investopedia.com