Business, 15.04.2020 03:42 prettygirlgwen24

Suppose, for example, that the Brazilian firm sells its shoes in the U. S. market for $10. Its profit margin is $6, or R300, because the shoes cost $4 to produce at the current exchange rate of R1 = $0.02. If Brazilian inflation is 100% but the nominal exchange rate remains constant, it will cost the manufacturer $8 to produce these same shoes by the end of the year. Assuming no U. S. inflation, how will the firm's profit be affected?

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Suppose, for example, that the Brazilian firm sells its shoes in the U. S. market for $10. Its profi...