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The dollar appreciated by 25% and now buys 100 yen That would give you the old buying power at 80 yen. And that would mean that the yen depreciated by 20%. And the rate of change of the exchange rate is also -20%.   Find the rate of change of the direct exchange rate of the yen in the US.

The dollar appreciated by 25% and now buys 100 yen That would give you the old buying power at 80 yen. And that would mean that the yen depreciated by 20%. And the rate of change of the exchange rate is also -20%.   Find the rate of change of the direct exchange rate of the yen in the US.

Principles of Economics 2e
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter29: Exchange Rates And International Capital Flows
Section: Chapter Questions
Problem 9SCQ: Is a country for which imports and exports comprise a large fraction of the GDP more likely to adopt...
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The dollar appreciated by 25% and now buys 100 yen
That would give you the old buying power at 80 yen.
And that would mean that the yen depreciated by 20%.
And the rate of change of the exchange rate is also -20%.

 

Find the rate of change of the direct exchange rate of the yen in the US.

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