Suppose the dollar depreciates from 89 Japanese yen to 79 Japanese yen.One would expect
A)U.S.imports to increase
B)U.S.exports to increase.
C)Japanese exports to increase.
D)Japanese net exports to increase.

Question

Quizplus · Accepted Answer

When the dollar depreciates against the yen, it means that it takes more dollars to buy the same amount of yen. This makes U.S. exports cheaper and more competitive in Japan, so U.S. exports are likely to increase. Conversely, Japanese exports to the U.S. become more expensive, so Japanese net exports are likely to decrease.

Suppose the Dollar Depreciates from 89 Japanese Yen to 79