Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a?
May 6th, 2009
Posted by: admin
Suppose that Pfizer, a U.S. firm, purchases $1 million worth of laptop computers from Sony, a Japanese firm. The laptops are produced in Japan.
Sony exchanges the $1 million at Tokyo Bank for 100 million yen. Tokyo Bank lends the $1 million to Honda Motor Company, which uses it to expand its automobile manufacturing facility in Indiana.
13.7. Suppose the exchange rates change such that Tokyo Bank now must exchange 125 million yen for $1 million. The U.S. dollar:
A. Stabilized
B. Appreciated
C. Depreciated
D. Got weaker
By: bob
Tags: 100 Million, Dollar, Pfizer
May 7th, 2009 at 19:20
B Appreciated.