Question

Which of the following is most likely to occur if a U.S. firm outsources some of its business operations to a Japanese company, and the Japanese yen strengthens against the dollar?

a) The probability of intellectual property laws being enforced would significantly decrease in Japan.
b) The U.S. company will experience additional cost savings in using the services of the Japanese company.
c) Outsourcing business operations to Japan would become less expensive.
d) The U.S. company will experience higher costs in using the services of the Japanese company."

Answer 1

If the Japanese yen strengthens against the dollar, the U.S. company will experience higher costs in using the services of the Japanese company.

Step-by-step explanation:

The correct answer is d) The U.S. company will experience higher costs in using the services of the Japanese company. When the Japanese yen strengthens against the U.S. dollar, it means that the Japanese yen has become more valuable compared to the dollar.

As a result, the U.S. company will need to convert more dollars into yen to pay for the outsourced services, leading to higher costs for the U.S. firm. This is because the Japanese company will require more dollars in exchange for their services.