If the Exchange Rate of Yen for Dollars Increases from 100

question 44

Multiple Choice

If the exchange rate of yen for dollars increases from 100 yen = $1 to 110 yen = $1,then:

• A)Japanese-produced goods would become more expensive.
• B)the dollar has depreciated.
• C)the yen has appreciated.
• D)Australian-produced goods would become more expensive.
• E)Australian exports would increase.

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Definitions:

Equilibrium Interest Rate

The equilibrium interest rate is the rate at which the demand for funds equals the supply of funds in the financial markets, balancing savings and investments.

Loanable Funds

The total amount of financial capital available for borrowing in financial markets.

Investment Projects

Initiatives undertaken by individuals, companies, or governments to allocate resources in the expectation of future financial returns.

Usury Laws

Regulations that set maximum interest rates which can be charged on loans, to protect borrowers from excessively high rates.