Suppose that the exchange rate between Japanese yen and U.S. dollars is originally 130 yen to the dollar. If it then changes to 150 yen to the dollar, imports of Japanese goods into the United States will tend to:

Question

Quizplus · Accepted Answer

When the exchange rate changes from 130 yen to the dollar to 150 yen to the dollar, the dollar has appreciated relative to the yen. This means that for each dollar, you can get more yen than before. As a result, Japanese goods become cheaper for American consumers, leading to an increase in imports of Japanese goods into the United States.

Suppose That the Exchange Rate Between Japanese Yen and U