If the U.S. dollar were to appreciate substantially, what steps could a domestic manufacturer like Cummins Engine Corporation of Columbus, Indiana take in advance to decrease the effect of the exchange rate fluctuation on company profitability?
If Boeing aircraft prices in dollars raise 20 % and the yen/dollar exchange rate declines 15 %, what effective price raise is facing Japan Airlines for the purchase of a Boeing 747? Would Boeing's margin likely increase or drop if the yen then depreciated and competitor prices were unchanged? Explain why?