Scenario: Sally Goes to Japan

question 82

Multiple Choice

Scenario: Sally Goes to Japan
Sally Johnson has identified a market for her company's products in Japan. She is excited about expanding her company, but knows that she needs to learn how the foreign exchange market works before she can successfully sell her products abroad.
-Which of the following is true about a quote of ¥117.87/$?

• A) It is equal to $.008484/¥.
• B) The quote is in U.S. dollars.
• C) This is an indirect quote on the yen.
• D) It costs a little more than a dollar to buy one yen.

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Definitions:

Monopolistic Competition

A market structure characterized by many firms selling products that are similar but not identical, allowing for competition based on factors other than price.

Positive Economic Profits

Earnings that exceed the total costs, including both explicit and implicit costs, signalling strong market performance.

Monopolistically Competitive

Monopolistically competitive refers to a market structure where many firms sell similar but not identical products, with each firm having some degree of market power.

Short Run

A time period in which at least one factor of production is fixed, focusing on immediate effects.