In japan there are tariffs price supports and import


In Japan, there are tariffs, price supports, and import restrictions such quotas on rice. Compare the price of rice in Japan to the price in the United States by using the yen/dollar exchange rate to convert the prices to a common currency. Do you see the wedge in the prices that the theory predicts? (Later in the book, we will also predict a single price of goods when trade barriers are insignificant through a theory called purchasing power parity.) If in fact the prices of rice expressed in the same currency were the same, what would the yen/dollar exchange rate have to be?

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Business Economics: In japan there are tariffs price supports and import
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