Suppose the Dollar Rises from 100 to 125 Yen

question 76

Multiple Choice

Suppose the dollar rises from 100 to 125 yen. As a result,

• A) imports from Japan will likely increase.
• B) exports to Japan will likely increase.
• C) Japanese tourists will be more likely to visit the United States.
• D) U.S. businesses will less likely use Japanese shipping lines to transport their products.

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Definitions:

Method

A systematic way of accomplishing something. In a financial context, this could refer to a specific approach or procedure adopted for accounting or analysis purposes.

Average Rate of Return Method

A method of evaluating capital investments by calculating the average annual profit expected from the investment and dividing it by the initial investment cost.

Present Value

The contemporary valuation of a future money sum or cash flow series, based on a predetermined return rate.

Time Value

The idea that having money now is more valuable than having the same sum in the future because of its ability to generate earnings.