If the Value of a Canadian Dollar Changes from ¥120

question 56

Multiple Choice

If the value of a Canadian dollar changes from ¥120 to ¥110,it follows that:

• A) the yen is depreciating,and the dollar is appreciating.
• B) Canadian goods become cheaper for Japanese consumers.
• C) Japanese goods become cheaper for Canadian consumers.
• D) Canadian services become more expensive for Japanese firms.

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Definitions:

Price Elasticity

A measure of how sensitive the quantity demanded of a good is to a change in its price.

Quantity Demanded

The overall volume of a good or service buyers are prepared and capable of acquiring at a designated price during a specified period.

Time Horizon

The length of time over which an investment or a project is intended or expected to occur.

Price Elasticity

A quantification of the demand elasticity for a good relative to its price alterations.