Assume that an Australian parts manufacturer exports parts that are priced in Australian dollars

to European companies. The demand for these parts declines with a strong Australian dollar.

The manufacturer also produces parts in Europe using European production inputs, these parts

are sold and priced in Euros. To reduce its economic exposure, the manufacturer could:

SELECT ALL APPROPRIATE ANSWERS

None of the other options are likely to reduce economic exposure

shift its own reliance to increase the usage of Australian suppliers for their inputs at both locations

close down its manufacturing plants in Europe

produce more parts in Europe

price its exports in Euros