3. Assume that an American company generates one-third of its earnings in U.S. Dollars, one-third of its earnings in Mexican Pesos, and one-third of its earnings in Canadian Dollars. The company does not expect earnings to increase in Mexico or Canada over the next year. If the company expects the U.S. Dollar to appreciate against Mexican Pesos and Canadian Dollars, it should also expect what?

1. Lower consolidated earnings in U.S. Dollars due to translation effects
2. Higher consolidated earnings in U.S. Dollars due to translation effects
3. No change in consolidated earnings in U.S. Dollars
4. It is impossible to tell with the information provided.