A Japanese Company That Makes Electronic Watches Exports 90 Percent

question 45

Multiple Choice

A Japanese company that makes electronic watches exports 90 percent of its products to the United States.Which of the following will happen if the dollar strengthens against the Japanese Yen?

• A)The company's watches will become less expensive in the US.
• B)The purchasing power of US consumers will decline.
• C)The company will have to reduce its number of employees.
• D)The company will export lesser number of watches to the US.

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Definitions:

Utility Function

A rephrased definition: A tool in economics to quantify an individual's satisfaction from consuming different bundles of goods and services.

Price

The sum of money needed to buy a product or service.

Utility Function

A mathematical representation expressing an individual's preference ordering over a set of goods and services, showing the level of satisfaction or utility derived from various bundles of goods.

Indifference Curves

A graph representing combinations of goods among which a consumer is indifferent, used in microeconomics to analyze consumer preferences and decision-making.