Suppose a U.S. importer agrees to pay a Japanese firm 55,000 yen for a shipment of goods. If the agreement is made when the exchange rate is $1 = ¥100, what is the change in the dollar value of the goods if the exchange rate changes to $1 = ¥110, on the payment-due date?
a. -$50
b. $550,000
c. -$550,000
d. $50
e. -$55,000
a
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A. $5 B. $15 C. $13 D. $16
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a. minimum; increased b. minimum; reduced c. optimal; increased d. optimal; reduced e. market; reduced
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