Reference no: EM131258783
The following demonstrates a weak (falling or depreciating) dollar.
A weak dollar means the dollar buys less of the foreign currency.
Compare a stronger dollar (US$1 = 100 yen) to a weaker dollar (US$1 = 80 yen). With the example below, show how a weak dollar affects the price of a specific U.S. import and export.
US import of a Japanese television that costs 40,000 Yen in Japan:
At US$1 = 100 yen, what is the price in US Dollars?
At US$1 = 80 yen, what is the price in US Dollars?
US export of a bushel of corn that costs $10 in the U.S.:
At US$1 = 100 yen, what is the price in yen?
At US$1 = 80 yen, what is the price in yen?
What might happen to the quantity of U.S. imports with a weak US dollar? Exports? (Increase/decrease?)
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