Skip to main content

Donald owns several hotels in New York, Las Vegas, and other centers of tourist activity. Much of Donald's hotel revenue comes from European...

In the scenario that you have laid out here, Donald’s hotel business will benefit when the dollar depreciates.  You might even say he will make so much money your head will spin.  This is because European tourists will be better able to afford to come and stay in his hotels.


When a European tourist comes to the United States, that tourist has to exchange euros (assuming they are from a country in the euro zone)...

In the scenario that you have laid out here, Donald’s hotel business will benefit when the dollar depreciates.  You might even say he will make so much money your head will spin.  This is because European tourists will be better able to afford to come and stay in his hotels.


When a European tourist comes to the United States, that tourist has to exchange euros (assuming they are from a country in the euro zone) for dollars.  They, in essence, have to buy the dollars that they will use to pay for things while they are in the US.  In the scenario from this question, the dollar depreciates relative to the euro.  What this means is that each dollar is worth fewer euros and, to look at things from the other perspective, each euro is worth more dollars.  What this means is that a tourist with a fixed number of euros to spend on vacation will be able to buy more dollars with that fixed number of euros.  In essence, going on vacation to the United States will have become cheaper for them.


We know from the law of demand that, when the price of a thing drops, consumers will be willing and able to buy more of it.  When the dollar depreciates against the euro, the price of American vacations essentially goes down for people from the euro zone.  When this happens, those people will (ceteris paribus) buy more American vacations.  Since Donald’s hotels make much of their money from European visitors, this means that business will improve.  Perhaps you can even say that the depreciation of the dollars will make his business great again.

Popular posts from this blog

In chapter one of The Great Gatsby, what advice does Nick's father give him? How does this make him a good person to tell this story?

Nick says that his father advised him that, before "criticizing anyone," he "remember that all the people in this world haven't had the same advantages" as Nick.  As a result, Nick claims that he is "inclined to reserve all judgments," presenting himself to the reader as a fair and dispassionate arbiter of character, and thus, a reliable narrator.   The problem is that Nick immediately reveals himself as anything but reliable, as he then launches... Nick says that his father advised him that, before "criticizing anyone," he "remember that all the people in this world haven't had the same advantages" as Nick.  As a result, Nick claims that he is "inclined to reserve all judgments," presenting himself to the reader as a fair and dispassionate arbiter of character, and thus, a reliable narrator.   The problem is that Nick immediately reveals himself as anything but reliable, as he then launches into a discussion of how pe...
Post a Comment
Read more

How and why does James Gatz become Jay Gatsby? Describe the young Gatsby/Gatz.

James Gatz, a poor Midwestern boy of probable Jewish lineage, becomes Jay Gatsby, a presumed WASP and wealthy socialite, when he moves to New York City and acquires his fortune. It is wealth that has allowed Gatz to transform himself into Gatsby. However, those who know his background (e.g., Daisy and Tom Buchanan) never allow him to forget that he is nouveau riche -- that is, an upstart who has just recently made his fortune,... James Gatz, a poor Midwestern boy of probable Jewish lineage, becomes Jay Gatsby, a presumed WASP and wealthy socialite, when he moves to New York City and acquires his fortune. It is wealth that has allowed Gatz to transform himself into Gatsby. However, those who know his background (e.g., Daisy and Tom Buchanan) never allow him to forget that he is nouveau riche -- that is, an upstart who has just recently made his fortune, whereas they arose from well-to-do families. Gatz became Gatsby through determination and discipline. At the end of the novel, the narr...
Post a Comment
Read more

Explain and discuss how the definitions of freedom change for the nation, for the freedmen and for southern whites after the Civil War.

After the Civil War, the definition of freedom changed in the nation, as slavery was ended with the 13th Amendment to the Constitution in 1865. The practice of slavery was disallowed, but definition of the freedom that would take its place was a subject of controversy, ongoing debate, and even violence in the decades to come.  For freedmen, freedom often meant reconciling with their families, who were broken up by slavery; choosing which church to... After the Civil War, the definition of freedom changed in the nation, as slavery was ended with the 13th Amendment to the Constitution in 1865. The practice of slavery was disallowed, but definition of the freedom that would take its place was a subject of controversy, ongoing debate, and even violence in the decades to come.  For freedmen, freedom often meant reconciling with their families, who were broken up by slavery; choosing which church to belong to without being ordered to attend religious services (or not to attend) by their mast...
Post a Comment
Read more