In Late 1994, It Was Announced That Japan's Monthly Current

question 11

Essay

In late 1994, it was announced that Japan's monthly current account was shrinking and that this effect could be permanent. Is this news good or bad for the Japanese yen? Why?

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales.

Short Run

A period in which at least one input, such as plant size or the number of firms in the market, is fixed and cannot be changed.

Fixed Cost

Any cost that does not depend on the firms’ level of output. These costs are incurred even if the firm is producing nothing. There are no fixed costs in the long run.

Marginal Costs

Marginal Costs involve the additional expenses incurred from the production of one extra unit of a product or service.