1 pts Question 46 Assume the British pound appreciates against the dollar while

Question

1 pts Question 46 Assume the British pound appreciates against the dollar while the Japanese yen depreciates against the dollar. Which of the following is true? O Japanese exporters can increase American sales by shifting operations from their British subsidiaries to Japan. British exporters can increase American sales by shifting operations from their Japanese subsidiaries to Britain. O American exporters can increase sales to Japan by shifting operations from Japanese subsidiaries to American subsidiaries. B and C

Explanation / Answer

option - A ..............true

An exporter can increase sales or get benefited when currency ( country of operation) depreciates. In option - A, currently operations are from british subsidary. Since British pound is in appreciation, exporter earns lower dollars from sale. If he shits operation base to Japan, he can earn more dollars since dollar is in appreciation to yen. Thus Invoice raised in terms of yens fetches more dollar value than invoice raised in terms of pounds.

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