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Automobile Makers and the Yen Free Essay, Term Paper and Book Report

Introduction The 1980’s was an interesting decade. An actor was elected president in not just one but two landslides, the Iron Curtain fell, along with the Cold War and the United States shocked the sports world when their ice hockey team beat the Soviet Union for a gold medal. Also, the 1980’s saw the U.S. dollar appreciate considerably between 1980-1985 and crash between 1985-1989 (Foreign Exchange Rates, 2006). Boyes (2004) states that a falling United States dollar would make U.S. autos cheaper in other nations. The author offers up an example: a U.S. made BMW carries a price of $40,000. If the conversion rate of the Euro was €1.4 for every $1 U.S., then the Euro price tag would be 40,000 x 1.4 which translates to €56,000. Now, suppose that the Euro is falling and now the rate is €1.1 for every $1 U.S. The BMW, made here, now costs €44,000 instead of €56,000 following the reduced Euro. This, economists argue, will cause consumers to purchase these automobiles because consumers will buy more cars at the lower price. During this period of 1985-1989 when the U.S. do......

Word Count: 645
Page Count: 2.5  (250 words a page / double spaced)


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