Given favorable elasticity conditions, other things equal an appreciation of the yen results in
A) a smaller Japanese trade deficit.
B) a larger Japanese trade surplus.
C) decreased prices for imported products for Japan.
D) increased prices for imported products for Japan.

Question

Quizplus · Accepted Answer

An appreciation of the yen makes foreign goods cheaper for Japanese consumers, leading to decreased prices for imported products in Japan.

Given Favorable Elasticity Conditions, Other Things Equal an Appreciation of the Yen