Dollar appreciated or depreciated against the yen

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Use the following information to answer the questions below. Assume that the capital account is 0.

Exports of goods and services

500

Primary income received

Secondary income received

200

300

Imports of goods and services

700

Primary income paid abroad

300

Secondary income paid

100

Net acquisition of financial assets

300

Net incurrence of liabilities

400

Net change in financial derivatives

600

Suppose the dollar-yen exchange rates is 0.01 dollar per yen. Since the base year, inflation has been 2 percent in Japan and 10 percent in the United States. What is the real exchange rate? In real terms, has the dollar appreciated or depreciated against the yen?

Reference no: EM133124919

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