Starting with an Exchange Rate of $1 = ¥110,and a Price

question 106

Multiple Choice

Starting with an exchange rate of $1 = ¥110,and a price tag of ¥5,000 for a Japanese good,what happens to the dollar price of the good if the yen depreciates by 4 percent?

• A)the dollar price of the good rises from $45.45 to $47.72
• B)the dollar price of the good falls from $45.45 to $43.64
• C)the dollar price of the good falls from $550,000 to $522,500
• D)the dollar price of the good rises from $550,000 to $577,500
• E)​the dollar price of the good rises falls from $450 to $427.50