Exchange Rates and Market Share
Response to the following problem:
Minnesota Co. is a U.S. firm that exports computer parts to Japan. Its main competition is from firms that are based in Japan, which invoice their products in yen. Minnesota's exports are invoiced in U.S. dollars. The prices charged by Minnesota and its competitors will not change during the next year. Will Minnesota's revenue increase, decrease, or be unaffected if the spot rate of the yen appreciates over the next year? Briefly explain.