This week, we have addressed how differences between exchange rates can affect the cost or profitability of a transaction. The following exercise is designed to reinforce your understanding of this process and how currency exchange rates affect the price of goods bought or sold in another country.
Review the International Exchange Rate Conversions Presentation (Links to an external site.) from Wisc-Online and Current Exchange Rates (Links to an external site.) from X-Rates. Plot a graph of the American Dollar versus the Euro over the past year (or 120 days) and answer the following questions:
- What has happened to the US Dollar versus the Euro over this period?
- What has been the effect on foreign imports into the United States?
- What has been the effect on US exports
Submit your graph along with your responses in a Microsoft Word document or Microsoft Excel Spreadsheet