Question

Suppose that the Australian dollar has appreciated substantially against the Euro over the past year. This movement is likely to have benefitted _________, while negatively affecting __________. A. Australian Importers; German Exporters. B. German Importers; German Exporters. C. Australian Exporters; German Exporters. D. Australian Importers; German Importers. E. None of the options.

Answer 1

Suppose that the Australian dollar has appreciated substantially against the Euro over the past year. This movement is likely to have benefitted Australian Importers, while negatively affecting German Exporters.

A. Australian Importers; German Exporters. (Correct Option)

Explanation:

When the Australian dollar appreciates in compare to the Euro, in such situation, the Australian importer will need to pay less amount of Australian dollars against the import payment in Euros. Hence the Australian importers will be benefitted and the German exporters will be in loss.

On the other hand, the Australian Exporters will be in loss because they will receive less amount in Australian dollors in compare to sales made in Euro, and the Gernam Imporers will get benefitted.