Question

Which of the following businesses would prefer a strong U.S. dollar to a weak one?

Answer 1

Answer:

An Egyptian company that exports clothing to the U.S.

Explanation:

The question above is related to "exchange rate." This refers to the value or price of one currency in response to another currency. This is largely determined by "supply" and "demand."

A strong U.S. dollar means that its value is relatively high when it comes to trading. So, this means that it has a high strength of buying more from the other currency than before. This makes the imports cheaper and the exports more expensive. This is the best time for a person to travel abroad.

So, among the choices above, the Egyptian company that exports its clothing to the U.S. will prefer a strong U.S. dollar to a weak one. This is because the American people will find the Egyptian clothing cheaper, thus strengthening their purchasing power. The Egyptian company will then be able to increase their sales.

So, this explains the answer.