In 2004, McDonald’s reported that its sales in Europe exceeded its sales in the United States for the first time. It reported the same result in subsequent years. This performance, while reflective of the company’s phenomenal success in Europe, was also attributed to the weak dollar in relation to the euro. McDonald’s reports its sales wherever they take place in U.S. dollars. Explain why a weak dollar relative to the euro would lead to an increase in McDonald’s reported European sales. Why is a weak dollar not relevant to a discussion of McDonald’s sales in the United States?
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