If the Japanese yen depreciates against the Australian dollar:Question 10Select one:a.Japanese businesses gain by a rise in the dollar price of exports to Australiab.Japanese consumers gain by a fall in the yen price of Australian exports to Japanc.Japanese consumers lose on account of a rise in the yen price of Australian exports to Japand.Australian consumers lose on account of a rise in the dollar price of Japanese exports to Australia
Question
If the Japanese yen depreciates against the Australian dollar:Question 10Select one:a.Japanese businesses gain by a rise in the dollar price of exports to Australiab.Japanese consumers gain by a fall in the yen price of Australian exports to Japanc.Japanese consumers lose on account of a rise in the yen price of Australian exports to Japand.Australian consumers lose on account of a rise in the dollar price of Japanese exports to Australia
Solution
c. Japanese consumers lose on account of a rise in the yen price of Australian exports to Japan
Explanation: When the Japanese yen depreciates against the Australian dollar, it means that the value of the yen is falling in comparison to the Australian dollar. This means that it takes more yen to purchase the same amount of Australian goods. Therefore, for Japanese consumers, the price of Australian goods in yen terms would increase, making Australian exports more expensive. Hence, Japanese consumers lose due to the increased cost of Australian goods.
Similar Questions
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If the price level in Japan is 3.0, the price level in Australia is 6.0, and it costs 50 Yen to buy one Australian dollar, then the real exchange rate between Australia and Japan (the price of domestic goods in terms of Japanese goods) is
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