German firms import machinery from the UK. What will happen to the supply of German goods manufactured using machinery from the

Question

sasho [114]

2 years ago

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German firms import machinery from the UK. What will happen to the supply of German goods manufactured using machinery from the

UK, if the value of the euro rises against the British pound

Business

1 answer:

marysya [2.9K] · Answer 1 · 2023-10-06T21:29:54+03:00

If the value of the euro rises against the British pound, the supply of German goods manufactured using machinery from the UK, will increase.

<h3>What is the impact of the appreciation of the euro?</h3>

When the euro appreciates, more euro would buy the same quantity of British pound. So, the cost of the machineries would be lower to the German firms. As a result, the demand for machineries from the UK would increase and this would increase the supply of German goods.