Question

The government just released international exchange rate statistics and reported that the real effective exchange rate index for the U.S. dollar vs the Japanese yen decreased from 105 last year to 95 currently and is expected to fall still further in the coming year. Other things equal U.S. ________ to/from Japan think this is good news and U.S. ________ to/from Japan think this is bad news.

Answer 1

Answer:

Other things equal U.S. exporters to Japan think this is good news and U.S. importers to Japan think this is bad news.

Explanation:

The Real Effective Exchange Rate is the average of a currency of a country concerning an index of other currency. A decreased USD-Yen REER is good news for U.S. exporters to they will earn more money for each item sold in Japan, but it is bad news for importers because they will pay more money for each item brought to the U.S.