When the nominal exchange rate in terms of dollars per yen rises,
A. the dollar buys fewer yen and the dollar has depreciated.
B. the dollar buys more yen and the dollar has appreciated.
C. the dollar buys more yen and the dollar has depreciated.
D. the dollar buys fewer yen and the dollar has appreciated.
Answer: A
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If Eddie can produce 40 milk shakes or 20 banana splits in an hour, and Tina can produce 30 milk shakes or 16 banana splits in an hour, then Eddie has a comparative advantage in producing banana splits
Indicate whether the statement is true or false
When a country establishes one rate as the exchange rate, but allows their currency to fluctuate within a certain percentage of that value, it is said to have
A) parity bands. B) dollarized. C) a currency basket. D) a pegged currency.
Policies to keep inflation in check ________
A) are, typically, fiscal policies B) are a potential cause of high unemployment C) are unlikely to be needed, so long as government spending remains high D) include increasing the quantities of money and saving E) are desirable in the short run, but may produce bad long-run outcomes
Why are banks using more automatic teller machines (ATMs) and employing fewer human tellers? What economic principle is illustrated about resource markets by this example?
What will be an ideal response?