Reference no: EM133637608
Question
1. Match the event to the expected exchange rate effect between Japan (whose currency is the yen) and South Africa (whose currency is the rand). Assume each has a floating exchange rate policy.
1. Japanese tourists cancel their travel plans to safari in South Africa.
a. Increased supply of rand leads to appreciation of the yen and depreciation of the rand
b. Decreased demand for rand leads to revaluation of the yen and devaluation of the rand
c. increased supply of the yen leads to appreciation of the rand and depreciation of the yen.
d. Decreased demand for rand leads to appreciation of the yen and depreciation of the rand
e. Reduced demand for the rand leads to appreciation of the yen and depreciation of the rand.
f. Increased supply of the yen leads to revaluation of the rand and devaluation of the yen.
2. South African banks raise their interest rates.
a. Increased supply of rand leads to appreciation of the yen and depreciation of the rand
b. Decreased demand for rand leads to revaluation of the yen and devaluation of the rand
c. increased supply of the yen leads to appreciation of the rand and depreciation of the yen.
d. Decreased demand for rand leads to appreciation of the yen and depreciation of the rand
e. Reduced demand for the rand leads to appreciation of the yen and depreciation of the rand.
f. Increased supply of the yen leads to revaluation of the rand and devaluation of the yen.
3. Japan introduces a new Lexus SUV (manufactured in Japan) that is very popular among South African buyers.
a. Increased supply of rand leads to appreciation of the yen and depreciation of the rand
b. Decreased demand for rand leads to revaluation of the yen and devaluation of the rand
c. increased supply of the yen leads to appreciation of the rand and depreciation of the yen.
d. Decreased demand for rand leads to appreciation of the yen and depreciation of the rand
e. Reduced demand for the rand leads to appreciation of the yen and depreciation of the rand.
f. Increased supply of the yen leads to revaluation of the rand and devaluation of the yen.
4. The loss of tourism in South Africa makes South African hotel chains less profitable to invest in.
a. Increased supply of rand leads to appreciation of the yen and depreciation of the rand
b. Decreased demand for rand leads to revaluation of the yen and devaluation of the rand
c. increased supply of the yen leads to appreciation of the rand and depreciation of the yen.
d. Decreased demand for rand leads to appreciation of the yen and depreciation of the rand
e. Reduced demand for the rand leads to appreciation of the yen and depreciation of the rand.
f. Increased supply of the yen leads to revaluation of the rand and devaluation of the yen.