A Firm Produces Products for Which Substitute Products Are Produced

Multiple Choice

A firm produces products for which substitute products are produced in all countries. Depreciation of the firm's local currency should:

A) decrease local sales as foreign competition in local markets is reduced.
B) decrease the firm's exports denominated in the local currency.
C) decrease the returns earned on the firm's foreign bank deposits.
D) decrease the firm's cash outflow required to pay for imported supplies denominated in a foreign currency.
E) None of these are correct.