Bua 3345 International Business Module 4 Journal Strong Doll ✓ Solved

Bua 3345 International Businessmodule 4 Journal Strong Dollar Desirab

After reading Chapter 7 of the textbook for this module’s lessons, you will be prepared to complete this journal assignment. In this journal entry, you will consider what affect exchange rates have on the business activity in a nation. You will have the opportunity to think about what happens to a country’s imports and exports when their currency appreciates or depreciates. To successfully complete this journal assignment, share whether you agree with the following statement and explain why or why not: “A strong dollar is not desirable to U.S. businesses, while it may be to businesses in other countries.”

Your journal entry should be up to two paragraphs in length.

Sample Paper For Above instruction

The value of the U.S. dollar significantly influences the country's international trade dynamics, impacting both exports and imports. A strong dollar, characterized by high exchange rates compared to other currencies, tends to make U.S. goods more expensive for foreign buyers, thereby reducing exports. Conversely, it makes imported goods cheaper for American consumers and businesses, leading to an increase in imports. In this context, many U.S. businesses, especially those reliant on exporting products abroad, find a strong dollar undesirable because it diminishes their competitiveness in global markets. They may struggle to maintain market share when foreign consumers opt for cheaper, locally produced alternatives or goods from countries with weaker currencies.

On the other hand, businesses in countries with weaker or depreciated currencies often view the dollar's strength as advantageous, particularly if they depend on importing goods from the U.S. or other countries with strong currencies. When the dollar is strong, these foreign businesses can source U.S. products at more competitive prices, improving their profit margins. Additionally, the strength of the dollar may attract foreign investment into the U.S., which benefits multinational corporations operating here. However, the overall impact of a strong dollar tends to favor consumers by making imported goods cheaper but can harm U.S. exporters by increasing their costs abroad, thus reducing sales. Therefore, while a strong dollar benefits consumers and importers, it largely creates challenges for U.S. exporters, which substantiates the idea that it is not desirable for U.S. businesses engaged in export activities.

References

• Chen, H., & Rozanov, A. (2020). International Economics: Theory and Policy. McGraw-Hill Education.
• Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2018). International Economics (11th ed.). Pearson.
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