The Demand Curve for Japanese Yen Is Downward Sloping Because

question 150

Multiple Choice

The demand curve for Japanese yen is downward sloping because when the exchange rate (measured in dollars per yen) falls,

• A) Japanese goods become relatively cheaper so foreigners buy more of them and need more yen to do so.
• B) foreigners need more dollars to buy one yen so they can now afford more Japanese goods.
• C) the yen demand curve shifts to the right as foreigners try to buy more Japanese goods.
• D) the dollar becomes weaker and this reduces the strength of both economies.
• E) everyone wants fewer yen because they have lost some of their underlying value.

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Definitions:

Average-Cost Method

An inventory valuation method that calculates stock value based on the average cost of goods available for sale during the period.

Ending Inventory

Refers to the total value of goods available for sale at the end of an accounting period, not yet sold.

Lower-of-Cost

A principle requiring that inventory is recorded at the lower cost between its original purchase price and its current market price.

Market Inventory

The total quantity of goods available for sale in the market.