An Appreciation of the U

question 98

Multiple Choice

An appreciation of the U.S. dollar relative to the Japanese yen causes

• A) A lower dollar-price of Japanese goods which induces the U.S. to increase their purchasing of Japanese goods.
• B) the quantity demanded of U.S. dollars to increase because the Japanese want to buy more U.S. goods.
• C) the Japanese to buy more U.S. goods, causing the dollars to appreciate further.
• D) the U.S. to buy less Japanese goods, causing the U.S. to depreciate.

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Definitions:

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good, expressed as a percentage change.

Excise Tax

A tax levied on specific goods or commodities sold within a country, such as alcohol and cigarettes.

Price Elasticity

A parameter for gauging the response of demand to price variations of a product.