Question

Imagine you are a small company based in the US that has operations in China. What...

Imagine you are a small company based in the US that has operations in China.

What happens when the dollar gets stronger?

What happens when the dollar gets weaker?

How do these price fluctuations impact your business?

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Answer #1

When the United States dollar gets stronger what happens is that the people from China might not be willing to get the services or goods from your company e to be exported because there would be more pricey for them as a result of which your business can hit in a negative way as far as the exports are concerned to China and similarly the the United States dollar become weaker, then yourcompany goods will become more cheaper in China so that the get to demand more as a result of which your business takes off as far as operations in China is concerned and that is the reason why when you consider the price fluctuations it is better for the currency to depreciate in order for your business to take off well and doesn't happen in the other way

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