ECONOMICS
BALANCE OF PAYMENTS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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More yen will be required to purchase one dollar
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The dollar has weakened relative to the yen
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Fewer yen will be required to purchase on dollar
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The Japanese supply of yen will increase
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Detailed explanation-1: -If the U.S. dollar appreciates against the Japanese yen, the exports to Japan will fall as the Japanese will find the goods and services imported from the U.S. more expensive than before.
Detailed explanation-2: -Answer and Explanation: When the dollar appreciates relative to the Japanese yen, a single dollar buys more Japanese yen. This also means that the Japanese yen buys fewer dollars. If a single Japanese yen buys fewer dollars, the Japanese yen has depreciated relative to the dollar.
Detailed explanation-3: -If the dollar appreciates (the exchange rate increases), the relative price of domestic goods and services increases while the relative price of foreign goods and services falls. 1. The change in relative prices will decrease U.S. exports and increase its imports.
Detailed explanation-4: -When the value of the U.S. dollar rises in relation to other currencies, exported products become more expensive in those foreign markets and are less competitive. On the other hand, imported products become less expensive in U.S. markets and are more competitive.