Better Business, 5/e

Objective 4-5 International Business: Economic Factors and Challenges

1. Define exchange rates, explain how they affect international business, and discuss the economic factors and challenges that play a role in conducting business on a global scale.

When Rachel Gao decided to expand her jewelry business to include handbags, she thought importing them would be cheaper than purchasing them from a domestic company. Initially, she thought she would purchase the handbags from a small European designer, but after she saw the exchange rate for the euro, she changed her mind. Because of the high exchange rate of the euro relative to the U.S. dollar, ...