Suppose that a US-based company is buying Chinese goods. Current exchange rate for Chinese Yuan is 0.15 USD. The price of goods is ¥13,000 per unit. The company is buying 800 units per year with a fixed contract for the next two years. Suppose that Chinese Yuan appreciate to 0.2 USD in the next year. The US importer will respond to this by lowering the demand to 600 units in the third year. Plot the J-

Suppose that a US-based company is buying Chinese goods. Current exchange rate for Chinese Yuan is 0.15 USD. The price of goods is ¥13,000 per unit. The company is buying 800 units per year with a fixed contract for the next two years. Suppose that Chinese Yuan appreciate to 0.2 USD in the next year. The US importer will respond to this by lowering the demand to 600 units in the third year. Plot the J-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Suppose that a US-based company is buying Chinese goods. Current exchange rate
for Chinese Yuan is 0.15 USD. The price of goods is ¥13,000 per unit. The company
is buying 800 units per year with a fixed contract for the next two years. Suppose
that Chinese Yuan appreciate to 0.2 USD in the next year. The US importer will
respond to this by lowering the demand to 600 units in the third year. Plot the J-
curve (write the amounts for month 1, 2 and 3)

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