MKT529 GDB 1 Solution and Discussion

[zareen]

Learning objectives:

The objective of this GDB is to make students familiar with real life issues related to exports and relate it with academic concepts.

Scenario

Since the current government came into practice, there has been huge increase in Dollar rate. According to statistics exports also increased for the said time. According to news the value of dollar is stable now at a fix rate and exports have been increased at the rate of 7.7% during last month.

Requirement

Keeping in view above scenario, discuss whether change in dollar rate has an influence on exports or not.

Learning outcome:

After attempting this GDB students will be able to go through real life situations in the country and will be able to analyze whether exchange rate fluctuations have any impact on exports or not.

[zareen]

@zareen said in MKT529 GDB 1 Solution and Discussion:

discuss whether change in dollar rate has an influence on exports or not.

How does exchange rate affect imports and exports?
The exchange rate has an effect on the trade surplus (or deficit), which in turn affects the exchange rate, and so on. In general, however, a weaker domestic currency stimulates exports and makes imports more expensive. Conversely, a strong domestic currency hampers exports and makes imports cheaper.