Define the benefits and consequences of strategy

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Example: A decrease in the U.S. exchange rate can help domestic firms that export to other countries and at the same time can have a negative impact on firms that import their inputs from overseas. Given that the U.S. dollar declined against the Great Britain pound U.S. automobile manufacturers will have a price advantage when selling comparable luxury cars in England.

  • In recent news there was a discussion about the possibility that some European Union members were considering a strategy of intentionally devaluing their currency against the dollar in order to increase exports. Explain how it is possible for a country to intentionally devalue its' currency and then define the benefits and consequences of this strategy.

Reference no: EM132294145

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