The sharp decline of the U.S. dollar between 1985 and 1995 significantly improved the profitability of U.S. firms both at home and abroad.
a. In what sense was this profit improvement false prosperity?
b. How would you incorporate the decline in the dollar in evaluating management performance? In making investment decisions?
c. Comment on the following statement: ‘‘The sharp appreciation of the U.S. dollar during the early 1980s might have been the best thing that ever happened to American industry.''