Asked by Liezel Paglinawan on Jul 26, 2024
Verified
If the dollar price of yen rises, then
A) the yen price of dollars also rises.
B) the dollar depreciates relative to the yen.
C) the yen depreciates relative to the dollar.
D) the dollar will buy fewer U.S. goods.
Dollar Price
The cost of a good or service expressed in terms of the amount of U.S. dollars needed to purchase it.
Depreciates
The process by which an asset loses value over time, often due to wear and tear or passage of time.
Yen
The official currency of Japan, known in finance as an essential part of the foreign exchange market.
- Absorb the principles of exchange rates and their significance in worldwide trade.
Verified Answer
AA
ahmad addasiJul 27, 2024
Final Answer :
B
Explanation :
If the dollar price of yen rises, it means that it takes more dollars to buy the same amount of yen. This means that the dollar has depreciated relative to the yen. Therefore, option B is correct. Option A is incorrect because if the dollar price of yen rises, the yen price of dollars falls. Option C is incorrect because the yen appreciates in value relative to the dollar. Option D is incorrect because it is unrelated to the movement of the dollar price of yen.
Learning Objectives
- Absorb the principles of exchange rates and their significance in worldwide trade.