Assume that until yesterday, one U.S. dollar could be exchanged for 85 Japanese yens. Today, a dollar gets you 102 yens. Which of the following statements is true?
A) U.S. goods will be more expensive in Japan.
B) Japanese goods will be more expensive in the U.S.
C) U.S. goods will be the same price in Japan.
D) Japanese goods will be the same price in the U.S.
E) None of these.

Question

Quizplus · Accepted Answer

With the exchange rate shifting in favor of the Japanese currency, it now takes more U.S. dollars to purchase one yen. This means that U.S. goods will be more expensive for Japanese consumers, as they will need more yens to purchase the same product.

Assume That Until Yesterday, One U