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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Definitions:

Pragmatics

The patterns of intonation and social roles associated with a language.

Heuristics

Mental shortcuts or "rules of thumb" that simplify decision making, but can sometimes lead to biased or inaccurate judgments.

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The language that a person has been exposed to from birth or within the critical period, often considered one's first language or mother tongue.