A train pass costs 250 Japanese yen, and the yen/dollar exchange rate is 100. If the dollar appreciates, increasing the yen/dollar exchange, what will happen to the cost of the train pass to an American traveler using dollars?
A)The price of the pass in dollars will increase.
B)The price of the pass in dollars will decrease.
C)The price of the pass in dollars will remain the same.
D)There is no way of knowing with the given information.

Question

Quizplus · Accepted Answer

If the dollar appreciates, it means that the exchange rate for yen/dollar increases. This means that each dollar can buy more yen. Therefore, the cost of the train pass in dollars will decrease.

A Train Pass Costs 250 Japanese Yen, and the Yen/dollar