When would be best time to enter market of a foreign country

Reference no: EM13897800

1. Why is the pass-through from changes in exchange rates to changes in the prices of products not one-for-one? Given that real exchange rates fluctuate, when would be the best time to enter the market of a foreign country as an exporter to that market?

2. You have been asked to evaluate possible sites for an Asian production facility that will manufacture your firm's products and sell them to the Asian market. What real exchange rate considerations should you entertain in your evaluation?

3. Why is it important for an exporter to understand the distinction between a temporary change in the exchange rate and a permanent change in determining whether to respond to a real depreciation of the home currency with increased production or sales out of inventories?

Reference no: EM13897800

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