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Hi Sir, this qns part (iii) for the additional business risk can I mention like inflation leads to depreciating peso currency hence making imports more expensive, sales of the packaged goods might be affected adversely.
And part (a) drawbacks of reducing protectionist measure are more companies will dump their products at a cheaper rate. can I mention this in my answer.
ok thanks Sir
Another question on this qns part (iii) inflation is constant at 8% for the foreseeable future and I computed the exchange rates is depreciating every year. Does it mean that the currency is depreciating because in this qns Chmura co (Dec 2013) inflation is constant?Please in future ask in the Ask the Tutor Forum if you want me to answer. This forum is for students to help each other.
Exchange rates don’t depreciate – it is currencies that depreciate 🙂
Here the peso is depreciating (dollars are buying more pesos).It is because the inflation in peso-land is higher than inflation in $-land (purchasing power parity).
ok sir I keep going to the wrong forum..sorry about that. I will take note in future.
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