A Big Mac in Japan Costs 320 Yen While It

question 7

Multiple Choice

A Big Mac in Japan costs 320 yen while it costs $3.60 in the U.S.. The nominal exchange rate is 80 yen per dollar. Which of the following would both make the real exchange rate move towards purchasing-power parity?

• A)the price of Big Macs in the U.S. falls, the nominal exchange rate falls
• B)the price of Big Macs in the U.S. falls, the nominal exchange rate rises
• C)the price of Big Macs in the U.S. rises, the nominal exchange rate falls
• D)the price of Big Macs in the U.S. rises, the nominal exchange rate rises

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Definitions:

Edward T. Hall

An American anthropologist known for his work in the field of intercultural communication and the study of nonverbal language and social space.

Nonverbal Communication

The process of conveying a message without the use of words, such as through body language, gestures, and facial expressions.

Unwritten Messages

Non-verbal or implicit forms of communication that convey information without the use of clear, written language.

Unspoken Messages

Communication that is conveyed through means other than words, such as through actions or body language.