Dollar and yen exchange rate

Assignment Help Business Economics

Reference no: EM131238709

Suppose that the dollar/yen exchange rate on 1/1/2015 was ¥120/$. One month later, the rate was ¥115/$. If the J-curve theory holds, which of the following situations would occur, all else being equal?

Japan's balance of trade would worsen, and then gradually improve.

America's balance of trade would worsen, and then gradually improve.

The balance of trade for both nations would remain constant.

Cannot be determined based on the information given.

Reference no: EM131238709

Questions Cloud

?nd another bundle that gives her same level of satisfaction : Rachel’s preferences for goods x and y are represented by the following utility function: U(X,Y ) = X1/2.Y 1/2. Find the marginal rate of substitution. Comment if it is increasing, constant or decreasing in x. Graph the indi?erence curves correspondi..

Interested in the ordering of bundles : We saw in class that since we are only interested in the ordering of bundles, a positive monotonic transformation (one that does not change the order) of a utility function also represents the same preferences. Mathematically, a positive monotonic tr..

Project the amount in her pension plan at retirement : Jill starts working on her 23rd birthday with an annual saary of $57,000. She sets aside 4.5% of her salary at the end of each year for her pension plan, whch is matched by her employer. She hopes her retirement account can make 5.5% per year interes..

Balance trade would have on the value of the dollar : Transactions between the US and the rest of the world are shown below. What would be the initial impact that the US balance trade would have on the value of the dollar?

Dollar and yen exchange rate : Suppose that the dollar/yen exchange rate on 1/1/2015 was ¥120/$. One month later, the rate was ¥115/$. If the J-curve theory holds, which of the following situations would occur, all else being equal?

The immediate impact on russias balance of trade : Suppose Russia's GDP increases at a faster rate relative to its trading partners over the course of the year. What will be the immediate impact on Russia's balance of trade?

Pressure on the value of the british pound : Assume that the real interest rate becomes much higher in the U.K. relative to the U.S. This will place ____ pressure on the value of the British pound. Also, assume that inflation rates in the U.S. begin to rise relative to inflation rates in the U...

Expalin about country risk analysis and contingency plan : Breifly expalin about country risk analysis and contingency plan for germany in textile business.

Developing plan and connecting the local to the national : Your regional manager has asked you to develop a preliminary plan that would focus on how your bussiness can be a catalyst in 'local economic development'.

User Account

All Pages