1. Foreign Exchange Practice
Need a stress ball.
Business, Computers, & Information Technology
Unit
Chapter 7 38

3. Practice
1. What happens to the markets and values of the U.S. Dollar and the Japanese Yen if American tourists increase visits to Japan.
Dollar Market
Yen Market S1 S1
Yen price/
Dollar S
Dollar price/Yen S D1 D1 S1 S1 P P D1 D1 D D Q
Q of Dollars Q
Q of Yen D D S S D D S S
Supply increases
Dollar Depreciates
Demand increases Yen Appreciates
Submit
RESET

5. Practice
2. What happens to the markets and values of the U.S. Dollar and the Japanese Yen if the US government significantly decreases personal income tax. What happens to U.S. exports and imports?
Dollar Market
Yen Market S1 S1
Yen price/
Dollar
Dollar price/Yen S D1 S D1 S1 S1 P P D1 D1 D D Q
Q of Dollars Q
Q of Yen D D S S D D S S
Supply increases
Dollar Depreciates
Exports increase
Demand increases
Yen Appreciates
Submit
RESET

7. Practice
3. What happens to the markets and values of the U.S. Dollar and the Japanese Yen if inflation in Japan rises significantly faster than in the US. What happens to U.S. exports and imports?
Dollar Market
Yen Market S1 S1
Yen price/
Dollar
Dollar price/Yen S S D1 D1 S1 S1 P P D1 D1 D D Q
Q of Dollars Q
Q of Yen D D S S D D S S
Supply decreases
Dollar Appreciates
Exports decrease/Imports increase
Demand decreases
Yen Depreciates
Submit
RESET

9. Practice Supply increases Demand increases Yen Appreciates
4. What happens to the markets and values of the U.S. Dollar and the Japanese Yen if Japan has a large budget deficit that increases Japanese interest rates.
Dollar Market
Yen Market S1 S1
Yen price/
Dollar
Dollar price/Yen S S D1 D1 S1 S1 P P D1 D1 D D Q
Q of Dollars Q
Q of Yen D D S S D D S S
Supply increases
Dollar Depreciates
Demand increases Yen Appreciates
Submit
RESET

11. Practice
5. What happens to the markets and values of the U.S. Dollar and the Japanese Yen if Japan places high tariffs on all US imports. What happens to U.S. exports and imports?
Dollar Market
Yen Market S1 S1
Yen price/
Dollar
Dollar price/Yen S S D1 D1 S1 S1 P P D1 D1 D D Q
Q of Dollars Q
Q of Yen D D S S D D S S
Demand decreases
Dollar Depreciates
Exports decrease
Supply decreases
Yen Appreciates
Submit
RESET

13. Practice
6. What happens to the markets and values of the U.S. Dollar and the Japanese Yen if the US suffers a large recession. What happens to U.S. exports and imports?
Dollar Market
Yen Market S1 S1
Yen price/
Dollar
Dollar price/Yen S S D1 D1 S1 S1 P P D1 D1 D D Q
Q of Dollars Q
Q of Yen D D S S D D S S
Supply decreases
Dollar Appreciates
Exports decrease
Demand decreases
Yen Depreciates
Submit
RESET

15. Practice
7. What happens to the markets and values of the U.S. Dollar and the Japanese Yen if he US Federal Reserve sells bonds at high interest rates.
Dollar Market
Yen Market S1 S1
Yen price/
Dollar
Dollar price/Yen S S D1 D1 S1 S1 P P D1 D1 D D Q
Q of Dollars Q
Q of Yen D D S S D D S S
Demand increases
Dollar Appreciates
Supply increases Yen Depreciates
Submit
RESET

16. That’s It