Question
Determine whether each entity would be helped or hurt by a depreciation of the Brazilian Real. (3 points)
Helped Hurt
A Brazilian tourist who wants to visit Italy.
A South African consumer who buys Brazilian coffee.
A Brazilian investor who has already invested in US Stocks.
A Canadian investor who wants to invest in a Brazilian warehouse.
A Brazilian farm that exports soybeans to China.
Helped Hurt
A Brazilian tourist who wants to visit Italy.
A South African consumer who buys Brazilian coffee.
A Brazilian investor who has already invested in US Stocks.
A Canadian investor who wants to invest in a Brazilian warehouse.
A Brazilian farm that exports soybeans to China.
Answers
GPT-4o mini
Here’s how each entity would be affected by a depreciation of the Brazilian Real:
### Helped
- **A Brazilian tourist who wants to visit Italy:** Hurt (because the cost of traveling abroad increases as the Real weakens)
- **A South African consumer who buys Brazilian coffee:** Hurt (the cost of Brazilian coffee would increase for the South African consumer as the Real depreciates)
- **A Brazilian investor who has already invested in US Stocks:** Hurt (the value of their investment can decrease in Real terms when the Real depreciates)
- **A Canadian investor who wants to invest in a Brazilian warehouse:** Helped (the depreciated Real makes investments in Brazil cheaper for foreign investors)
- **A Brazilian farm that exports soybeans to China:** Helped (exports may become more competitive due to lower prices in foreign currency)
### Summary Table
| Helped | Hurt |
|------------------------------------|---------------------------------------------------------|
| A Canadian investor who wants to invest in a Brazilian warehouse | A Brazilian tourist who wants to visit Italy |
| A Brazilian farm that exports soybeans to China | A South African consumer who buys Brazilian coffee |
| | A Brazilian investor who has already invested in US Stocks |
### Helped
- **A Brazilian tourist who wants to visit Italy:** Hurt (because the cost of traveling abroad increases as the Real weakens)
- **A South African consumer who buys Brazilian coffee:** Hurt (the cost of Brazilian coffee would increase for the South African consumer as the Real depreciates)
- **A Brazilian investor who has already invested in US Stocks:** Hurt (the value of their investment can decrease in Real terms when the Real depreciates)
- **A Canadian investor who wants to invest in a Brazilian warehouse:** Helped (the depreciated Real makes investments in Brazil cheaper for foreign investors)
- **A Brazilian farm that exports soybeans to China:** Helped (exports may become more competitive due to lower prices in foreign currency)
### Summary Table
| Helped | Hurt |
|------------------------------------|---------------------------------------------------------|
| A Canadian investor who wants to invest in a Brazilian warehouse | A Brazilian tourist who wants to visit Italy |
| A Brazilian farm that exports soybeans to China | A South African consumer who buys Brazilian coffee |
| | A Brazilian investor who has already invested in US Stocks |