If Mexico has a weak peso relative to the dollar, what is the impact for U.S....
If Mexico has a weak peso relative to the dollar, what is the impact for U.S. companies importing inputs from Mexico that are priced in pesos?
The U.S. company will demand that the inputs are priced in dollars.
The U.S. company will lose money.
The U.S. company will demand that the inputs be priced in a third currency.
The U.S. company will benefit from its relatively strong dollar.
The U.S. company will experience no effect because of NAFTA.
Homework Answers
Option D The U.S. company will benefit from its relatively strong dollar.
The weakness of a currency with respect to dollar will benefit the US importers since they have to pay lesser amount due to the strength of dollar over the exchange currency.
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