The German firm Bayer reported that its pharmaceutical group experienced a 21 percent increase in profit for the second quarter of 2015. The firm stated that the increase was partly the result of "favorable currency effects."
a. Briefly explain what the firm means by "favorable currency effects."
b. How would favorable currency effects increase Bayer's profit?
c. Would these effects still have raised Bayer's profit if all of the firm's production and all of its sales were within Europe? Briefly explain.