One U.S. dollar trades for 110 yen. Which of the following correctly explains the effect on Japanese automobile prices for holders of U.S. dollars if the U.S. dollar appreciated relative to the yen?(1 point)

Question

Responses

Since one U.S. dollar is worth more yen, Japanese automobiles are relatively less expensive to holders of U.S. dollars.
Since one U.S. dollar is worth more yen, Japanese automobiles are relatively less expensive to holders of U.S. dollars.

Since one U.S. dollar is worth fewer yen, Japanese automobiles are relatively more expensive to holders of U.S. dollars.
Since one U.S. dollar is worth fewer yen, Japanese automobiles are relatively more expensive to holders of U.S. dollars.

Since one U.S. dollar is worth more yen, Japanese automobiles are relatively more expensive to holders of U.S. dollars.
Since one U.S. dollar is worth more yen, Japanese automobiles are relatively more expensive to holders of U.S. dollars.

Since one U.S. dollar is worth fewer yen, Japanese automobiles are relatively less expensive to holders of U.S. dollars.

Answer 1

If the U.S. dollar appreciates relative to the yen, it means that the dollar can be exchanged for more yen than before. Therefore, for holders of U.S. dollars, Japanese automobiles become relatively less expensive because they would need to spend fewer of their dollars to purchase the same amount of yen needed to pay for the automobiles.

The correct explanation is:

Since one U.S. dollar is worth more yen, Japanese automobiles are relatively less expensive to holders of U.S. dollars.