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Assume Isuzu produces a car in Japan for 1.8 million. On June 1, when new models are introduced, the exchange rate is 150/USD. Consequently, the
Assume Isuzu produces a car in Japan for 1.8 million. On June 1, when new models are introduced, the exchange rate is 150/USD. Consequently, the automaker sets the sticker price for the car at USD 12,000. By August 1, the exchange rate has dropped to \125/USD. Isuzu is worried that it will receive fewer Yen per sale ($12,000 ~ 125 = \1.5 million). What scenario(s) could explain the trajectory of the exchange rate? (3 points; 150 words) Assume Isuzu produces a car in Japan for 1.8 million. On June 1, when new models are introduced, the exchange rate is 150/USD. Consequently, the automaker sets the sticker price for the car at USD 12,000. By August 1, the exchange rate has dropped to \125/USD. Isuzu is worried that it will receive fewer Yen per sale ($12,000 ~ 125 = \1.5 million). What scenario(s) could explain the trajectory of the exchange rate? (3 points; 150 words)
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