Suppose the Exchange Rate Is Initially Set at 100 Yen

question 41

Multiple Choice

Suppose the exchange rate is initially set at 100 yen per dollar and increases to 125 yen per dollar.This would be expected to cause the price of U.S.goods in the Japanese economy to

• A)increase.
• B)change in a manner that cannot be determined without additional information.
• C)remain the same since domestic demand remains the same.
• D)decrease.

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