(Ch 13) Due Today at 11 PM CST 6. Pricing foreign goods The nominal exchange rat
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(Ch 13) Due Today at 11 PM CST 6. Pricing foreign goods The nominal exchange rate is the price of one currency in terms of another currency. A nominal exchange rate specifies how many units of one country's currency are needed to buy one unit of another country's currency Suppose the following table presents nominal exchange rate data for August 14, 2014, in terms of U.S. dollars per unit of foreign currency. Use the information in the table to answer the questions that follow (Dollars) 0.4755 0.8666 1.2151 0.008538 Brazilian real (BRL) Euro (EUR) 1.7552 Suppose that on August 14, 2014, an ornamental bookcase handmade in Germany is priced at EUR 830. The approximate U.S. dollar price of the bookcase would be If the nominal exchange rate for the U.S. dollar-Japanese yen rises from $0.008538 to $0.0093918 per Japanese yen, the Japanese yen ,relative to the US. dolar.Explanation / Answer
(1) Approximate US Dollar price of bookcase = $1,008.53 (= EUR 830 x 1.2151 US Dollar/EUR)
(2) Yen Increased in value, or Appreciated against the dollar (When Exchange rate increases, price of 1 Yen increases from $0.008538 to $0.0093918).
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