If Inflation in the United States Is Relatively Higher Than

question 1

Multiple Choice

If inflation in the United States is relatively higher than inflation in Japan, and the Japanese government wants to keep the exchange rate fixed between the yen and the dollar, it should most likely ________.

• A)allow its currency to rise against the dollar
• B)allow its currency to fall against the dollar
• C)increase the supply of yen in the market
• D)decrease the supply of yen in the market

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Definitions:

Average Variable Costs

The total variable costs (costs that change with the level of output) divided by the number of units produced, indicating the average cost of producing each unit.

Industry Giants

The largest and most influential companies within a sector, known for their market domination, innovation, and financial capabilities.

Lower Prices

Lower prices indicate a decrease in the cost that consumers are asked to pay for goods or services, often aimed at boosting sales or competitiveness.

Marketing Mix

The combination of factors that can be controlled by a company to influence consumers to purchase its products, typically includes product, price, place, and promotion.