Suppose the exchange rate between the United States and Japan changed from $1 =150 yen to $1 = 140 Yen, which of the following statements is true?

Question

Quizplus · Accepted Answer

The exchange rate shows how much of one currency is worth compared to another currency. When the exchange rate between the United States and Japan changes from $1 = 150 yen to $1 = 140 yen, it means that the value of one dollar has decreased in relation to the yen. This is called depreciation. As a result, it takes more dollars to buy the same amount of yen than before, which means that the price of yen in dollars has increased. Therefore, choices B, C, and D are incorrect.

Suppose the Exchange Rate Between the United States and Japan