Assume that the exchange rate between the dollar and the yen is 100 = $1. Suppose the exchange rate changes to 170 = $1. What
Assume that the exchange rate between the dollar and the yen is 100 = $1. Suppose the exchange rate changes to 170 = $1. What is the price in yen of a $250 iPod before and after the exchange rate change? (5 marks) If the Bank of Japan were to enter a phase of monetary policy tightening (i.e. increasing their policy interest rate) while the Reserve Bank of Australia left the official cash rate unchanged, how might this affect the value of the Australian dollar relative to the Japanese y? (In your answer, make sure you explain the mechanism by which changes in the relative interest rate inuence the exchange rate). Which of the following graphs of the market for Australian dollars best illustrates question 3 (c)? (choose either Graph 1, Graph 2 or Graph 3) (mm IM me my. It All!!!" do\"! m Graph 1 Graph 2 Graph 3
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