Suppose the Exchange Rate Is Initially Set at 120 Yen

question 28

Multiple Choice

Suppose the exchange rate is initially set at 120 yen per dollar and increases to 140 yen per dollar.This would be expected to cause the price of Japanese goods in the U.S.economy to

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

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