Given a two-country world, suppose Japan devalues the yen by 20 percent and west German devalues the mark by 15 percent This result is a (an)?
Correct answer: D. depreciation in the value of the yen against the mark
- A. appreciation in the value of both currencies
- B. depreciation in the value of both currencies
- C. appreciation in the value of the yen against the mark
- D. depreciation in the value of the yen against the mark
Explanation
The yen loses 20 percent of its value while the mark loses only 15 percent, so the yen becomes relatively weaker than the mark. Therefore, the yen depreciates against the mark.
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