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Sir I have a doubt regarding this question from the mock exam.
Q. Mant co is manufacturing co in country Westland & it neither importing nor exporting. If the currency of Westland strengthens with respect to other currencies, what is the likely effect on Mant co’s sales?I also do not like the economics bit of this course and on times struggle to answer questions. Here is my take on this question.
Since the country does not do any trading so the price of imports and exports is out of question. So, i would say then that it depends what state the economy of country is in. If the country is going through economic boom, meaning there is economic growth and low unemployment, then the strong currency will be beneficial as it will reduce the inflationary pressure. And if the country is going through recession or depression then the strong currency will only add to the problems since the domestic demand will fall further.
Thats all i can think of, maybe John can add to it
When are you planning to sit F1? I am sitting it in the first week of August
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