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Japan decides to replace its yen with a new currency, the zen. Each zen is worth...

Japan decides to replace its yen with a new currency, the zen. Each zen is worth 100 yen. This will stimulate their exports.

True or false?

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Answer #1

As it is given that the Japan decides to replace its yen with a new currency, the zen and Each zen is worth 100 yen but there is no change in the relative value of zen or yen of Japan to foreign currency. Hence nothing can be said about the export from Japan. This is because Japan has just replace his old yen with new Zen and

1 zen=100 yen

Since there is no change in the exchange rate of the foreign currency, hence export will be unaffected.

Hence this given statement is false that if Japan decides to replace its yen with a new currency, the zen and Each zen is worth 100 yen. Then this will stimulate their exports.

Hence False.

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