[Anonymous]

Assuming US depreciated domestic currency and Japanese appreciated foreign currency.

1. what will the effect be on ‘demand for US dollars” & “demand for domestic investment” – increase or decrease?

2. what will the effect be on ‘demand for Japanese Yen” & “demand for foreign investment” – increase or decrease?

3. what will the effect be on ‘US exports” to Japan import – increase or decrease?

4. what will the effect be on ‘US goods & service in Japanese Market” – Advantage or Disadvantage?

5. what will the effect be on ‘US goods & service in US Market” – Advantage or Disadvantage?

6. what will the effect be on ‘Japanese goods & service in US Market” – Advantage or Disadvantage?

7. what will the effect be on ‘Japanese goods & service in Japanese Market” – Advantage or Disadvantage?

I was preparing a summary of exchange rate effect. However, I was very confused of those elements above. Many thanx in advance

[Anonymous]

1. what will the effect be on ‘demand for US dollars” & “demand for domestic investment” – decrease

2. what will the effect be on ‘demand for Japanese Yen” & “demand for foreign investment” – increase

3. what will the effect be on ‘US exports” to Japan import – increase or decrease? -increase

4. what will the effect be on ‘US goods & service in Japanese Market” – Advantage because us goods are cheaper in japan

5. what will the effect be on ‘US goods & service in US Market” – Advantage or Disadvantage? Not sure possibly adv. because goods are cheaper now so people people will use home grown products more. Import falls.

6. what will the effect be on ‘Japanese goods & service in US Market” – Disadvantage because expensive in us

7. what will the effect be on ‘Japanese goods & service in Japanese Market” – Advantage or Disadvantage? Not sure again. possibly disadv. because goods are expensive now. so people will tend to import more. Import increases.

I hope this helps.

[Author]

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