Question #81594
In 2017 the exchange rate is 1 ¥ (Japanese Yen) to $0.02 (US dollar). In 2018 the exchange rate is 1 ¥ to $0.01. Answer the following questions.
a) Is the above quote a direct or indirect quote? Why?
b) Between 2017 and 2018 did the dollar appreciate or depreciate?
c) As a result of the change in exchange rates between 2017 and 2018 will US exports become cheaper or more expensive to the Japanese?
d) As a result of the change in exchange rates between 2017 and 2018, will US imports from Japan become cheaper or more expensive to Americans?
a) Is the above quote a direct or indirect quote? Why?
b) Between 2017 and 2018 did the dollar appreciate or depreciate?
c) As a result of the change in exchange rates between 2017 and 2018 will US exports become cheaper or more expensive to the Japanese?
d) As a result of the change in exchange rates between 2017 and 2018, will US imports from Japan become cheaper or more expensive to Americans?
Expert's answer
a) The above quote is indirect quote, because the domestic currency is fixed at 1 unit.
b) Between 2017 and 2018 the dollar appreciated, as you can buy less dollars for 1¥.
c) As a result of the change in exchange rates between 2017 and 2018 US exports will become more expensive to the Japanese.
d) As a result of the change in exchange rates between 2017 and 2018, US imports from Japan become cheaper to Americans.
b) Between 2017 and 2018 the dollar appreciated, as you can buy less dollars for 1¥.
c) As a result of the change in exchange rates between 2017 and 2018 US exports will become more expensive to the Japanese.
d) As a result of the change in exchange rates between 2017 and 2018, US imports from Japan become cheaper to Americans.
