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1) When the dollar is worth more in relation to currencies of other countries, are you...

1) When the dollar is worth more in relation to currencies of other countries, are you more likely to buy American made or foreign made jeans? Are US companies that manufacture jeans happier when the dollar is strong or when it is weak? What about an American company that is in the business of importing jeans to the US? Explain your answers thoroughly

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Answer #1

The answers to this three-part question are outlined below.

- When the U.S. dollar is worth more in relation to currencies of other countries, I'm more likely to buy foreign-made jeans. This is because the relative strength of the dollar affords me a higher degree of purchasing power in foreign markets.

- U.S. companies that manufacture jeans are happier when the dollar is weak, because their product is less expensive for foreigners. Generally, this will increase the demand for their product and resulting sales revenue.

- An American company that is in the business of importing jeans into the United States is happier when the dollar is strong, because the relative strength of the dollar affords them a higher degree of purchasing power in foreign markets.

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