Suppose the exchange rate is initially set at 120 yen per dollar and increases to 140 yen per dollar.This would be expected to cause the price of Japanese goods in the U.S.economy to

Question

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An increase in the exchange rate means that the dollar has appreciated in value relative to the yen. As a result, Japanese goods would become relatively cheaper for U.S. consumers, and their prices would be expected to decrease.

Suppose the Exchange Rate Is Initially Set at 120 Yen