When considering the currency pass-through phenomenon, all of the following factors give an indication as to the appropriate action EXCEPT:
A) the customer's price sensitivity.
B) government actions.
C) the impact of dollar appreciation on the firm's cost structure.
D) the impact of dollar depreciation on the firm's cost structure.
E) the amount of competition in the export market.

Question

Quizplus · Accepted Answer

Government actions are not a factor that gives an indication as to the appropriate action to take when considering the currency pass-through phenomenon. The other factors listed (customer's price sensitivity, impact of currency appreciation/depreciation on the firm's cost structure, and amount of competition in the export market) are all important considerations when determining how to respond to currency fluctuations.

When Considering the Currency Pass-Through Phenomenon, All of the Following