Assume an initial exchange rate of a1yen100 and then show


Explain the likely impact of $A appreciation on non-mining sectors of the Australian economy such as manufacturing and agriculture. As part of your explanation, include a numerical example by assuming that a Japanese car imported into Australia has a constant landed price of two million yen. Assume an initial exchange rate of A$1=Yen100, and then show numerically how a strengthening $A (assume the exchange rate becomes A$1 = Yen 200), other things equal, is bad for Australian car manufacturing firms.

 

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Microeconomics: Assume an initial exchange rate of a1yen100 and then show
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