Effect of Exchange Rate Changes
Effect of Exchange Rate Changes: Describe how a change in the exchange rate affected your firm. Explain what happened to your price and quantity. How can you profit from future shifts in the exchange rate? How do you predict future changes in the exchange rate…
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
Effect of Exchange Rate Changes
Paper details
Review Group Problem: Exchange Rate Effects on Your Firm:
Describe how a change in the exchange rate affected your firm. Explain what happened to your price and quantity. How can you profit from future shifts in the exchange rate? How do you predict future changes in the exchange rate? As its relates to you and your current position in the work environment. Complete your response in 750-1,000 words. Support your response with personal experiences or examples.
Use the petroleum industry for this assignment. Imagine that you work for a domestic oil refinery, and answer the questions above . You do not work for an oil producer, but rather for a refinery, which turns crude oil into many different petroleum products, from jet fuel to gasoline, which are then sold to world markets.
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
You have the option of purchasing crude oil from U.S. sources or from various foreign countries. You must purchase crude oil in order to make products that you can sell in the United States or in other countries.
Solution
Effect of Exchange Rates Changes
Different countries adopt diverse economic models, which have a direct impact on exchange rates. To put this into perspective, a country’s exports and imports are definitive of an open economy. Trade activities in international markets entail the supply and demand of products, causing exchange rates to appreciate or depreciate.
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
Therefore, our firm will take precautionary measures to counterbalance oil price fluctuations and product availability, focusing on changes in foreign exchange. With crude oil having high price volatility, it is imperative to examine how exchange rate changes affect the oil trade activities of the firm.
Exchange rates can either appreciate or depreciate. Depreciation results from a decline in the exchange rate, weakening the domestic currency against international currencies. Consequently, imports get increasingly expensive while exports become cheaper in the international markets will find our products cheaper, though in the short run. Occasionally, the dip in prices will attract consumers over that period as there will be high demand, and the company will move to offset the uneven business sphere by putting in place countermeasures.
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
Through these initiatives, the global markets experience price hikes as prices will become moderately high, a move that provides a counterbalance between demand and supply of crude oil products. Research shows an increase in equilibrium price results from increasing market demand, which shifts a demand curve to the right. Our firm will raise crude oil prices to offset high production costs and could realize profits on a short-term basis.
Appreciation is a positive change in the exchange rate, where the domestic currency improves vis a vis foreign currencies. For this reason, consumers will find our products and services costly since currency renders imports cheaper and exports expensive. According to Kumar (2019), appreciating domestic currency, given the high price of domestic products and services, will shift the demand curve downwards to the left.
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
It is important to note that consumers are price-sensitive, and slight changes in the exchange rates will affect supply and demand trends in global markets. When exchange rates appreciate, there is a short-run demand for products and services; hence the market equilibrium demand will be lower, and the company will respond by reducing prices.
During the short duration, the sale of crude oil products will be drastically lower, making the company experience losses, though in the short-term. Low prices will not sufficiently counter the high production costs given low demand products in the global market. Recovery measures to hamper high crude oil costs will need to be streamlined, given sales in the US will still be drastically low. An unsustainable scenario will be created for the short-run demand.
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
The firm’s ability to be flexible in the global market will allow us to address the ever-changing markets. For instance, our firm can venture into producing complementary products and countering exchange appreciation risk caused by shifts in the exchange rate.
Additionally, a bolstered economy will likely experience an appreciated domestic currency given high foreign direct investment volumes. The crude oil industry is greatly affected by changes in exchange rates, hence the need for key players in the US to be involved in our future contracts to supply products at stipulated market prices (Chen, & Ward, 2019).
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
This initiative is economically viable as it hedges decreases in demand arising from domestic currency appreciation. Moreover, variations in products’ nature are key towards addressing concerns with decreased demand upon rises in exchange rates. In this case, our firm will create a temporary situation product supply will be reduced, creating shortages that act as moderators against low demand.
Our firm will be aggressive towards establishing future trends in macroeconomic variables. The variables include the supply and demand for domestic currency, interest rates, government debt, and payment deficit balance. Most organizations are skeptical about imports and exports of crude oil products.
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
For instance, where a country exports more than it imports, it may initiate strategies to influence demand by lowering domestic currency. Moreover, speculative demand by individuals, funds, and individuals can vary given perceptions by individual countries and their economies. Another critical aspect of the interest rate is sensitivity exhibited with changes in interest and inflation rates; increasing interest rates signify the local currency’s rising value.
Changes in exchange rates greatly influence both government operations and trading activities in similar extremes. Therefore, a counterbalance between trade deficits and government debt determine future changes in exchange rates. The balance of trade is exemplified in the national bank’s account and shows disparities between imports and exports’ value.
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
An illustration would be where our country exports more than imports; this demand for more foreign investments piles pressure on exporting countries’ foreign currencies to rise. It is imperative to state that the appreciation of the foreign currency and the effect imposed on local currency are dependent on each other. Consequently, a state that would default paying the national debt would cause inflation and rising concerns over public debt.
References
- Chen, Y., & Ward, F. (2019). When do fixed exchange rates work? Evidence from the Gold Standard. Journal of International Economics, 116, 158-172.
- Kumar, S. (2019). Asymmetric impact of oil prices on exchange rate and stock prices. The Quarterly Review of Economics and Finance, 72, 41-51.
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
Health Care Systems Essay Examples
| Growth of Hospitals and Health Care Systems with Benefits of Long-Term Care Facilities” | Growth of Hospitals and Health Care Systems with Benefits of Long-Term Care Facilities” |
| Discuss how health care delivery systems work collaboratively to address global health concerns and some of the stakeholders that work on these issues | Select a global health issue affecting the international health community. Briefly describe the global health issue and its impact on the larger public health care systems |
| Drivers Of High Performance Healthcare Systems | NR 506 Week 5: Drivers of High Performance Healthcare Systems Select two drivers (for example quality, cost, and access) of high performance healthcare systems and apply it to your current work situation. |
| Ethics, Policy, And Health Care Delivery Systems | Describe current federal health care policies and standards that are designed to offer guidance to health organizations to ensure quality of care among vulnerable populations |
| A Comparison of Healthcare Systems | Comparison of Healthcare Systems in US. |
As you continue privateEssaywriters.com has the top and most qualified writers to help with any of your assignments including how to manage stress in workplaces. All you need to do is place an order with us (Effect of Exchange Rate Changes).
Read More:
Human Services Organization Identification – Project Milestone 1 Solution
Prudence and Formal Reasoning – Discussion 1 Solution
