look for in terms of leading indicators ( discuss at least three indicators ), and what recommendations would you make to uppermanagement based on your findings regarding leading indicators ? Be sure to consider the macroeconomic nature of leading indicators , and the microeconomic nature of your firms ’ decisions . ( 30 points ) ( Points : 30 )
9 . ( TCO G ) Let the exchange rate be defined as the number of dollars per Japanese yen . Assume that there is a relatively lower rate of inflation in the U . S . relative to that of Japan . ( 30 points )
( Part A ) Would this event cause the demand for the dollar to increase or decrease relative to the demand for the yen ? Why ? ( 5 points )
( Part B ) Has the dollar appreciated or depreciated in value relative to the yen ? ( 5 points )
( Part C ) Does this change in the value of the dollar make imports cheaper or more expensive for Americans ? Are American exports cheaper or more expensive for importers of U . S . goods in Japan ? Illustrate by showing the price of a U . S . e-reader in Japan , before and after the change in the exchange rate . ( 10 points )
( Part D ) If you had a business exporting goods to Japan , and U . S . inflation fell as discussed above in this example , would you plan to expand production or cut back ? Why ? ( 10 points ) ( Points : 30 )