Suppose That on January 1 the Exchange Rate Was ¥120

question 271

Essay

Suppose that on January 1 the exchange rate was ¥120 per U.S. dollar. On December 31 of that year, it was ¥125 per dollar. Over the course of that year, did the dollar appreciate or depreciate against the yen? Did the change in the exchange rate make U.S. goods and services more or less attractive to Japanese consumers? Explain.

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Definitions:

Proprietary Fund

A type of government fund created to manage activities that are similar to those found in the private sector, where services are provided to the public for a fee.

Statement of Net Position

A financial statement that displays an organization's assets, liabilities, and net position at a specific point in time, highlighting its financial health.

Statement of Revenue

A financial statement that shows the income earned by a company over a certain period of time.

Fiscal Year

A one-year period used for financial reporting and budgeting, which may or may not align with the calendar year.