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Some countries, many being developing countries, peg their currency to the US dollar. What effect does a rapid appreciation or devaluation of the dollar have on those countries?

PART A: ESSAY QUESTIONS

Question 1
In deciding whether to export to another country or build their own sales or production site, based on understanding of trade theory and theories of FDI what are the key considerations for international managers making this choice? Give examples where necessary.

Question 2
Some countries, many being developing countries, peg their currency to the US dollar. What effect does a rapid appreciation or devaluation of the dollar have on those countries?


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