Consider MNCs that produce products in the United States and export the products to developing countries The MNCs could reduce their exposure to exchange rate risk if they set up their operations in the countries to which they export Such a restructuring would cause a shift in expenses to the devel...

First there would be a large cost to closing down thei ...

Consider MNCs that produce products in the United States and export the products to developing countries. The

Question:

Consider MNCs that produce products in the United States and export the products to developing countries. The MNCs could reduce their exposure to risk if they set up their operations in the countries to which they export. Such a restructuring would cause a shift in expenses to the developing countries, and those expenses could be paid for with revenue earned in the same currency. Write a short essay in which you explain the practical limitations of this solution, which can help to explain why some MNCs do not pursue this strategy.
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...