Macroeconomics is based in the systems theory of output and income and
             to the interrelations among sectors of the economy. It is concerned with
             large-scale or general economic factors, such as interest rates and
             national productivity. A major factor in macroeconomics is the extreme
             variability of exchange rates. Considering that prices of goods reflect
             stocks of money, prices of comparable goods should not be different in two
             locations so that the rate of depreciation of the currency is maintained at
             a rate equal the difference between the two countries inflation rates
             (Roubini and Backus Internet source).
             Between April of 1990 and July of 1993, the yen "rose" from 158 yen
             per dollar to 106, a thirty percent rise in three years. Since Japanese
             wages didn't fall relative to those in the US, this meant that Japanese
             exporters, like Toyota, faced a comparable increase in their costs. In the
             North American market, this gave the Big Three a big competitive advantage,
             a replay of the situation of the late 1980s. This left the Japanese
             automobile exporters with three options: (1) to maintain current prices and
             allow for a significant decrease in profit margin; to increase the price so
             as to maintain profit margins on car sales in the US or (3) to increase the
             price by less than the thirty percent change in order to maintain market
             share but with the result of minimally decreased profits.
             There are a number of variables that need to be considered in making
             a determination based on a depreciation of currency. The first of these is
             profit. In order to maintain the same rate of profit, the Japanese car
             manufacturer would have had to increase the price of cars sold in the
             United States. They could do so at the same rate as the depreciation (in
             this case, thirty percent) or they could increase prices at a rate less
             An increase by the full depreciation rate would mai...