Suppose the real exchange rate of 105 Japanese yen to the dollar moves to 115 yen to the dollar.The dollar has _________________,making Japanese goods __________ expensive for Americans.
A) appreciated; less
B) appreciated; more
C) depreciated; less
D) depreciated; more

Question

Quizplus · Accepted Answer

When the exchange rate moves from 105 yen to the dollar to 115 yen to the dollar, it means that the dollar has appreciated against the yen. The same dollar can now buy more yen than before. As a result, Japanese goods become less expensive for Americans because it takes fewer dollars to purchase the same amount of yen needed for these goods.

Suppose the Real Exchange Rate of 105 Japanese Yen to the Dollar