what is the EFFECT of interest rate and exchange rate on the sales of a local good?
606751
When interest rates go up, the economy tends to slow down and consumption with it the sales would likely go down.  The opposite happens with interest rates going down.\n\nWhen a currency gains value with respect to other currencies, it's cheaper to buy goods abroad, so the sales for the local good would go down.  If the currency loses value, the opposite happens.\n\nThere might be exceptions with mandatory goods like bread or Giffen goods.
416789
A countries rate of exchange can change for numerous reasons but one topical reason could be the threat of 'terror'. Currency fluctuation work on the supply & demand theory. If no one is demanding (wants it) the currency, then the price will drop. This in turn means that if there is anything negative floating around about a country, then it is very likely that fewer people will want their currency (business & toursism - busniess is the greaterst consumer of international currency). Think of a country as a business and this makes more sense - a business with a lot of bad press or with a level of uncertainty will attract fewer customers/sales.\n\nMany countries still use the US Dollar as the international media of exchange but increasingly this depandance is being reduced as traders/business/Coutries increase their use of the Euro. This is having a real effect on the US economy and a reason that Mr Bush isn't a huge fan of Europe and it's enlargement.
950446
Cost to produce/market the product.\nGoing rate for similar products.
274167
It depends. If the firm has fixed-rate long-term debt, then changing interest rates would not affect is profitability unless the company were to reacquire that debt in the open market prior to maturity. If the long-term debt has a variable interest rate, then the firm would be affected by changing rates. In the short-run, many firms have lines are credit that are almost always based on current market rates, so changing interest rates would affect their short-term borrowing expenses.
684893
yes it has a great effect in macro economics dealing with exchange rates and interest rates and foreign trade. a weak or undervalued currency is better for manufacture of goods in your country and a strong currency is better if you import goods from other countries.
819019
It's a market. Countries, banks, companies buy and sell the currencies the need for their business and the law of supply and demand determines the exchange rates.\nThere are a few exceptions: a lot of currencies are not convertible outside the country where they are issued, and some currencies like the Chinese Yuan are pegged to the dollar, meaning that the exchange rate fluctuates only between small boundaries.
290004
Trading in the currency of other countries.
690043
If by the diminishing rate of interest you mean the APR (in the UK) - ie the rate that takes into account the fact that the loan will decrease in value over the term as it is repaid off....\n\nthen it will be slightly less than double the flat rate - so about 15%.\n\nNow this does depend on the size of the loan and the term - but it's a good approximation.
389057
I agree with VATreasuries, whom I will say has a very appropriate user name.\n\nHigher interest rates affect the monthly amount of money that people need to debt service a property.  Essentially, if money costs more... their costs are higher accordingly.\n\nOther factors like taxes & hazard insurance have similar effects (we Floridians know this all to well) restricting value.  Herein Monthly Costs.\n\nWhen these Monthly Costs exceed pace of income growth to where they become a higher ratio of gross income needed to service monthly... property values tend to recede.\n\nThese past years have arguably been an anomoly... largely because of an influx of investment dollars into real estate holdings.
1159706
It really depend on the product you are selling.\n\nLC
476005
Typically, smaller economies grow faster than developed economies as measured by GDP per capita.  The exchange rate, or value of their currency is affected by a lot of different factors including debt, barriers to trade, GDP, trade balance, etc.  All else being equal, if per capita GDP increases, the value of the currency should also increase.
829439
Sales and trading could be slightly higher in most places. But depends on the place really. There are banks that like their traders more than CM guys and vice versa.
787519
There are many issues here.\n1) Imports may be cheeper and still be as good or better.\n2) Importing goods is "exporting" jobs. Can lead to unemployment and downturns in the local economy.\n3) Limiting imports stops local firms from improving production processes as they make good profits under their production.\n4) Sometimes imported goods don't have the warranty and after sales service as local goods.\n5) Importing from one country often opens the door to exporting to the exporting country.\n\nCan be advantageous but has disadvantages as well.
689215
Exchange rates are not "decided" they are negotiated.  Currencies are just like commodities.  The price is set by supply and demand.  People needing currency exchange the currency they hold for the one they want.  Millions of these transactions happen daily.  The exchange rate at any moment in time reflects the last exchange of currencies at a given price.  If their are inconsistencies among several currencies, professional traders spot them quickly and buy the cheap one and sell the pricey ones and drive them all back to equilibrium.  If many people are buying (selling) one currency the price (exchange rate) will rise (fall).
960724
NONE. They are very very very very bad. The interest rates are about 250% to 500% or more. Do not do this.
183872
Well, actually it would depend on the rates of increase.  Theoretically, if demand and supply increase at matching rates, then the price should remain pretty stable.  This is assuming demand = 1 and supply = 1.  If demand increases at 1 and supply increases at 2, then the price might go down, for example.  (This also does not take into account marketing strategies and other variables!)
324099
When we import products from other countries we spend US currency to purchase them. This money then goes to fuel the economy of whichever country the product came from. (We pay applicable taxes on these products that go to our local city,state and federal government.) If other countries do not buy our products and we keep buying there products this affects jobs and the value of our money. A devalued dollar can work both ways. It will affect US citizens in a negative way and affect foreigners in a positive way. Hopefully the people we trust to keep this balance can manage to keep it in check. I hope this answer puts some light on the topic.