Question

Suppose the nominal exchange rate between the yen and the U.S. dollar is 120 yen per U.S. dollar, and that the nominal exchange rate between the Canadian dollar and the U.S. dollar is 1.60 Canadian dollars per U.S. dollar. How many yen would it take to buy a Canadian dollar?

Answer 1

Answer:

75

Explanation:

Given the following nominal exchange rates;

120 yen = 1 U.S. dollar

1.60 Canadian dollar = 1 U.S. dollar

Therefore,

120 yen = 1.60 Canadian dollar

1  Canadian dollar = 120 yen/1.6

1  Canadian dollar = 75 Yen

It will take 75 Yen to buy a Canadian dollar.