The US Dollar Exchange Rate, E, Where E Is the Nominal

question 38

Multiple Choice

The U.S. dollar exchange rate, e, where e is the nominal exchange rate expressed as Japanese yen per U.S. dollar, will depreciate when:

• A) real GDP in the U.S. increases.
• B) real GDP in Japan increases.
• C) the U.S. Federal Reserve tightens monetary policy.
• D) U.S. consumers decrease their preference for Japanese cars.

---

Definitions:

Z-Scores

Standardized scores that indicate how many standard deviations an element is from the mean.

Standard Normal Distribution

A probability distribution that has a mean of zero and a standard deviation of one.

Normal Distributions

An evenly balanced probability distribution centered around the mean, where data points close to the mean occur with greater frequency than those at a distance.

Normal Distributions

A bell-shaped probability distribution characterized by symmetry around the mean, describing many types of real-world data.