Why is it important for an exporter to understand the distinction between a temporary change in the exchange rate and a permanent change in determining whether to respond to a real depreciation of the home currency with increased production or sales out of inventories ...

Exporters benefit when their home currencies depreciate in real terms If the depreciation is t ...

Why is it important for an exporter to understand the distinction between a temporary change in the

Question:

Why is it important for an exporter to understand the distinction between a temporary change in the and a permanent change in determining whether to respond to a real depreciation of the home currency with increased production or sales out of inventories?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...