/*! This file is auto-generated */ .wp-block-button__link{color:#fff;background-color:#32373c;border-radius:9999px;box-shadow:none;text-decoration:none;padding:calc(.667em + 2px) calc(1.333em + 2px);font-size:1.125em}.wp-block-file__button{background:#32373c;color:#fff;text-decoration:none} Q. 8 In the mid- to late 1970s, the y... [FREE SOLUTION] | 91影视

91影视

Log out

Learning Materials

Features

Discover

Chapter 18: Q. 8 (page 495)

In the mid- to late 1970s, the yen appreciated in value relative to the dollar, even though Japan鈥檚 inflation rate was higher than America鈥檚. How can this be explained by improvements in the productivity of Japanese industry relative to U.S. industry?

Short Answer

Expert verified

Because of the high value of the yen, the Japanese could continue to provide their products at a discount because of their increased utility in comparison to American efficiency.

Step by step solution

01

Concept Introduction 

Money appreciation refers to the increase in the value of one currency as compared to another in the forex markets.

02

Explanation 

Despite the fact that Japanese costs increased in comparison to American costs, the yen appreciated because the increase in Japanese efficiency compared to American efficiency allowed the Japanese to continue offering their goods at a discount due to the yen's high value.

03

Final Answer 

Because of the high value of the yen, the Japanese could continue to provide their products at a discount because of their increased efficiency in comparison to American efficiency.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with 91影视!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

A German sports car is selling for 鈧�65,000. What is the dollar price in the United States for the German car if the exchange rate is 0.80 euro per dollar?

Go to the St. Louis Federal Reserve FRED database, and find data on the exchange rate of U.S. dollars per British pound (DEXUSUK). A Mini Cooper can be purchased in London, England, for拢17,865orinBoston,UnitedStates,for$23,495.

a. Use the most recent exchange rate available to calculate the real exchange rate of the London Mini per Boston Mini.

b. Based on your answer to part (a), are Mini Coopers relatively more expensive in Boston or in London?

c. What price in British pounds would make the Mini Cooper equally expensive in both locations, all else being equal?

If Mexicans go on a spending spree and buy twice as much French perfume and twice as many Japanese TVs, English sweaters, Swiss watches, and bottles of Italian wine, what will happen to the value of the Mexican peso?

Suppose the president of the United States announces a new set of reforms that includes a new anti-inflation program. Assuming the announcement is believed by the public, what will happen to the exchange rate on the U.S. dollar.

鈥淎 country is always worse off when its currency is weak (falls in value).鈥� Is this statement true, false, or uncertain? Explain your answer.
See all solutions

Recommended explanations on Economics Textbooks

Taxation Economics

Read Explanation
View all explanations

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.