Question

If the U.S. dollar appreciates, an MNC's: a. exports denominated in foreign currencies will probably increase. b. U.S. sales will probably decrease. c. interest owed on foreign funds borrowed will probably increase. d. exports denominated in U.S. dollars will probably increase. e. All of these choices are correct.

Answer 1

Most likely when the U.S. dollar appreciates, the MNC's interest owed on foreign funds borrowed will probably increase.

MNC refers to Multinational corporation .

• The Multinational corporation are known to borrow from foreign bodies in dollars.

• Hence, when the dollar appreciates, the amount owed to the foreign bodies will increase consequently.

Therefore, the Option C is correct because the MNC's interest owed on foreign funds borrowed will probably increase when U.S. Dollars appreciates.

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