Question

Between yesterday and today, the US dollar has appreciated against the yen. One of the impacts of this will be?

1) US-made goods that sell in Japan will be more expensive.
2) US-made goods that sell in the United States will be more expensive.
3) Japanese-made goods that sell in the United States will be more expensive.
4) nothing; there will be no impact on goods flowing overseas between the United States and Japan.

Answer 1

The appreciation of the US dollar against the yen makes US-made goods more expensive in Japan, potentially decreasing Japanese imports of American products, while Japanese-made goods could become cheaper in the US, potentially increasing American imports from Japan.

Step-by-step explanation:

When the US dollar appreciates against the yen, one of the impacts is that US-made goods become more expensive in Japan. This is because for Japanese consumers, it now takes more yen to buy the same amount of dollars, which means that the price of American goods in yen increases.

On the other hand, Japanese-made goods become relatively cheaper for American consumers since they can purchase more yen with their dollars, potentially increasing the import of Japanese goods into the United States. Such fluctuations in the exchange rate can lead to alterations in trade patterns, affecting both exporters and importers in the involved economies.