Question

When there is an increase in the value of the European Union’s euro, all else equal, how will American businesses be affected? What will happen when there is a decrease in the value of the American dollar relative to the Japanese yen, given all else is equal?

Short answer

Japanese products are more expensive than American products.

Step-by-step solution

Step 1. Introduction

A market where securities, commodities, derivatives, and other financial goods are traded is known as an exchange. The primary purpose of an exchange is to promote fair and orderly trading as well as the efficient broadcast of price information about securities traded on the exchange.

Step 2. Explanation

As the value of Euro appreciates, it will become a strong currency and will be a good medium of exchange. The demand for American goods will rise in United States. Similarly, when the value of American currency become low as compared to Japanese Yen, the Japanese goods will become more expensive.