If there is an appreciation to Kina relative to Yen, then PNG

Question

A. would need more Kina to buy Japanese goods.
B. get fewer Yen per Kina on foreign exchange market.
C. goods become more expensive for the Japanese to buy than before.
D. goods become cheaper for the Japanese to buy than before.

Answer 1

If there is an appreciation of the Kina relative to the Yen, it means that the Kina has strengthened against the Yen. In this case:

• A. would need more Kina to buy Japanese goods. (This is incorrect; if the Kina appreciates, it would require fewer Kina to buy Japanese goods.)

• B. get fewer Yen per Kina on the foreign exchange market. (This is incorrect; if the Kina appreciates relative to the Yen, you would get more Yen per Kina, not fewer.)

• C. goods become more expensive for the Japanese to buy than before. (This is correct; if the Kina appreciates, it means that the cost of goods from Papua New Guinea (PNG) becomes more expensive for Japanese buyers.)

• D. goods become cheaper for the Japanese to buy than before. (This is incorrect; if the Kina appreciates, it should make PNG goods more expensive for Japanese consumers.)

Therefore, the correct answer is C. goods become more expensive for the Japanese to buy than before.