Why does a U.S. company exporting wooden furniture manufactured in Malaysia to the European Union benefit from the decline in the value of the ringgit against the euro?
A. Because decline in the value of the ringgit against the euro has no impact on the cost of furniture manufactured in Malaysia, both in Malaysian or European markets.
B. Because decline in the value of the ringgit against the euro makes Malaysian goods less competitive in the U.S. market.
C. Because decline in the value of the ringgit against the euro raises the cost of furniture manufactured in Malaysia, making it less competitive in European markets.
D. Because decline in the value of the ringgit against the euro makes European goods more competitive as compared to Malaysian goods.
E. Because decline in the value of the ringgit against the euro reduces the cost of furniture manufactured in Malaysia, making it more competitive in European markets.
Answer: E
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