Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Your friend Jin is working at Company AUS Toys, an Australian manufacturing company, selling toys to Company Toy Shop. Company Toy Shop also buys
Your friend Jin is working at Company AUS Toys, an Australian manufacturing company, selling toys to Company Toy Shop. Company Toy Shop also buys toys from Company CNY Toys in China which has fixed exchange rate. Jin's senior manager is complaining about how Australian company is disadvantaged to the company in a country with fixed exchange rate. Jin is not sure about the differences in exchange rate will impact the business dealings with Company Toy Shop. 1. Identify and explain 2 advantages and 2 disadvantages of the fixed exchange rate. (4 marks) 2. Identify and explain 3 determinants of the exchange rate. (6 marks) 3. Explain why senior manager is complaining about the firm in a country with fixed exchange rates. (4 marks)
Step by Step Solution
★★★★★
3.40 Rating (162 Votes )
There are 3 Steps involved in it
Step: 1
1 In this circumstance the fixed exchange rate provides two benefits in particular for CNY Toys in China An exchange rate that is set firstly prevents currency volatility A fixed exchange rate guarant...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started