1. As the vice president of finance for a U.S. firm, what do you say to your production manager when he states, "We shouldn't let foreign exchange risk interfere with our profitability. Let's simply invoice all our foreign customers in dollars and be done with it."
2. What do economists mean by pricing-to-market?
3. Why does a monopolist not charge the same price for the same good in two different countries?
4. What determines how much a foreign producer allows the dollar price of a product sold in the United States to be affected by a change in the real exchange rate?