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If the Equilibrium Exchange Rate Between U

question 2

Multiple Choice

If the equilibrium exchange rate between U.S.dollars and Japanese yen is $0.01 = 1 yen,but currently the exchange rate is $0.009 = 1 yen,then with flexible exchange rates the dollar price of a yen will __________ and the yen will __________.


Definitions:

Net Working Capital

The financial difference marked by a company's present assets against its present liabilities, suggesting the company's economic condition in the short run.

Cash Flow

Cash flow refers to the net amount of cash and cash-equivalents being transferred into and out of a business, indicating its operational efficiency and liquidity.

Taxable Income

The amount of income used to calculate how much the entity or individual owes in taxes to the government.

Tax Bill

The amount of money owed by an individual or corporation to the taxing authorities as a result of income or other taxes.

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