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 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 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 less 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.

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

Answer 1

If the U.S. dollar appreciates relative to the yen, it means that one U.S. dollar can now be exchanged for more yen than before. This increase in value means that holders of U.S. dollars can spend fewer dollars to purchase the same amount of yen.

Consequently, Japanese automobiles will be relatively less expensive for holders of U.S. dollars because they can now exchange fewer dollars for the same price in yen.

Therefore, 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.