Question
Which one of the following would NOT be an appropriate response for a U.S. exporter to appreciation of the dollar? Note: Elastic here means that
Which one of the following would NOT be an appropriate response for a U.S. exporter to appreciation of the dollar?
Note: "Elastic" here means that the demand moves significantly to small price changes, whereas "inelastic" means demand does not change much in response to price changes.
Group of answer choices
A;move some production offshore if the appreciation were expected to persist for an extended period
B;raise the foreign currency price if the dollar appreciation was expected to be temporary and the cost of regaining market share was minimal
C;keep the foreign currency price constant if demand is quite elastic
D; lower the foreign currency price if demand is inelastic for the product
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