A high level of inflation in Thailand relative to the United States could affect Blades favorably. Generally, if a country's inflation rate increases relative to the countries with which ittrades, consumers and corporations within the country will most likely purchase more good sover seas, as local goods become more expensive. Consequently, Blades' sales to Thailand mayincrease. However, Blades imports rubber and plastic components from Thailand. Due to inflation, the cost of production of thesecomponentsin Thailand will go up. This would increase the cost of Goods Sold. But this negative impact will be low since only 4% of Cost of Goods Sold is attributableto rubber and plastic imported from Thailand. The net effect is that, Blades Inc.'s net profit would increase