The dollar-yen exchange rate falls from 100 to 80 yen per dollar. At the same time, the price level in the United States rises from 180 to 200, and the price level in Japan remains the same. As a result,
a. American goods have become more expensive relative to Japanese goods.
b. American goods have become less expensive relative to Japanese goods.
c. the relative price of American and Japanese goods has not changed.
d. both American and Japanese goods have become relatively less expensive.

Answer rating: 100% (QA)

Real exchange rate ... View the full answer