If the U.S.dollar appreciates relative to foreign currency,what is likely to be the result for the U.S.company that has branches abroad?
A) Profits will increase, when measured in U.S. dollars.
B) Profits will decrease, when measured in U.S. dollars.
C) Foreign exports to the United States will decrease.
D) Foreign demand for U.S. goods and services will decrease.

Question

Quizplus · Accepted Answer

When the U.S. dollar appreciates against other currencies, U.S. goods can be more expensive to consumers in foreign countries. Appreciation of the U.S. dollar can have negative implications for American companies that have branch operations overseas. The reason for this is that profits from abroad must be exchanged for dollars at a more expensive rate of exchange, reducing the amount of profit when measured in dollars.

If the USDollar Appreciates Relative to Foreign Currency,what Is Likely to Be