When a U.S. domestic producer begins selling exports, they typically need to worry about the foreign exchange market, since often the revenues an exporter earns are foreign currencies that then need to be traded into dollars. Because the foreign exchange value of the dollar tends to fluctuate, this adds an additional level of risk to the exporter’s business. What are some factors that would make a domestic producer willing to take on this extra and new type of risk?
|What additional expertise would a producer need to trade successfully in the export market and the foreign exchange market? To what extent is this different from the expertise necessary to sell domestically?||6|
|How could a producer benefit from a larger market for its products?||6|
|What additional benefits might a producer obtain from exporting?||6|
|Write up your analysis using correct language, explaining all your work||2|