S. dollars (the imports would be paid in U.S. currency, which would be weaker). However, there are several other things that need to be taken into consideration when analyzing the profitability of this venture. If an international crisis, such as a drought appeared, it would be essential to analyze how this affects the product that the U.S. is exporting (grain) and the product it is importing (cars). In terms of the first, if the grain production in the U.S. is not affected by the drought, then one can say that the exported grain is relatively more expensive, because of a constant demand compared to the decreasing supply (due to the drought) on the market. The U.S. would then be able to charge more for the product it is exporting. The car industry...
If this occurred, it depends how the car producing industries in Germany and the UK are affected by this and whether they can find alternative sources of supply.Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
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