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Chapter 20: Problem 30

If a Japanese DVD player priced at 12,000 yen can be purchased for \(\$ 60\), the exchange rate is a) 200 yen per dollar d) 200 dollars per yen b) 20 yen per dollar e) none of the above c) 20 dollars per yen

Short Answer

Expert verified
The correct exchange rate is a) 200 yen per dollar.

Step by step solution

01

Identify the Given Information

We have the following information: - Cost of DVD player in yen: 12,000 yen - Price of DVD player in dollars: $60 - Possible exchange rates (options a, b, c, and d)
02

Find the Proper Exchange Rate

To find the proper exchange rate, we must determine how many yen are equivalent to one dollar. We can use the formula: Exchange rate = Cost in yen / Price in dollars
03

Calculate the Exchange Rate

Now let's calculate the exchange rate using the given information: Exchange rate = \(12,000 \text{ yen}\) / \(\$60\) Exchange rate = \(200 \text{ yen per dollar}\)
04

Match the Calculated Exchange Rate to the Answer Choices

Now, we need to find which option matches the calculated exchange rate: a) 200 yen per dollar - This matches our calculated exchange rate. b) 20 yen per dollar - This does not match our calculated exchange rate. c) 20 dollars per yen - This does not match our calculated exchange rate, and it's not a reasonable rate since it's giving a higher dollar value to a single yen. d) 200 dollars per yen - This does not match our calculated exchange rate, and it is also not a reasonable rate for the same reason as option c. From the above analysis, we can see that only the first option (a) matches our calculated exchange rate.
05

Write the Final Answer

Thus, the correct answer is: a) 200 yen per dollar

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Most popular questions from this chapter

Suppose the world was on the gold standard. If Peru ran persistent trade deficits, ( \(\mathrm{OO} 3)\) a) Peru would be able to continue doing so with no consequences b) Peru's money stock would decline, its prices would fall, and its trade deficit disappear c) Peru would soon suffer from inflation d) Peru would raise tariffs and prohibit the shipment of gold from the country

Which statement is the most accurate? (LO2) a) Our balance on the current account is negative. b) Since our balance of payments is always zero, there is little to worry about. c) The income Americans receive from their foreign investments is much greater than the income foreigners receive for their American investments. d) Because our imports are much greater than our exports, the federal government is forced to make up the difference.

Which statement is the most accurate? (LO3) a) Since the euro was introduced it has lost almost half its value. b) The euro has facilitated trade among the members of the euro zone. c) The euro is now the world's most important reserve currency. d) The euro circulates as currency in most of the countries of the world.

Today international finance is based on ( \(\mathrm{LO3})\) a) the gold standard b) mainly a relatively free-floating exchange rate system c) fixed rates of exchange

The gold exchange standard was in effect from (LO3) a) 1900 to 1944 c) 1955 to 1980 b) 1944 to 1973 d) 1973 to the present
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