EconomicHomework

Questions Homework

1. What implications does currency pass-through have for a nation whose currency depreciations?

2. Suppose ABC Inc., U. auto manufacturer, obtains all of its auto components in the United States and that its costs are denominated in dollars. Assume the dollar’s exchange value appreciates by 50 percent against the Mexican peso. What impact does the dollar appreciation have on the firm’s international competitiveness? What about a dollar depreciation?