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Which of the following statements concerning the effects of fluctuating exchange rates on companies competing in foreign markets is NOT true.?
A. Exchange rate shifts can produce sometimes favorable and sometimes unfavorable effects on a company's competitiveness.
B. Domestic companies under pressure from lower-cost imports are hurt even more when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.
C. Exporters win when the currency of the country from which the goods are being exported grows weaker relative to the currencies of the countries that the goods are being exported to.
D. Fluctuating exchange rates pose significant risks to a company's competitiveness in foreign markets.
E. Domestic companies under pressure from lower-cost imports are benefited when their government's currency grows weaker in relation to the currencies of the countries where the imported goods are being made.
Compute the short- run and long- run results, explain the changes in the price and in the number of firms.
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Conclude how the abatement levels should be reallocated across the 2 industries to minimize costs.
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