Final answer:
The yen-dollar exchange rate directly affects how much U.S. consumers pay for Japanese goods. A stronger yen (lower yen/dollar rate) means consumers pay less for Japanese goods, while a weaker yen (higher yen/dollar rate) means they pay more.
Step-by-step explanation:
The change in the yen-dollar exchange rate has been significant for U.S. consumers because it affects how much they pay for goods imported from Japan. When the yen is stronger compared to the dollar (a lower yen/dollar rate, such as 103 yen/dollar in 2005), U.S. consumers pay less for Japanese goods in dollar terms. Conversely, if the yen is weaker (a higher yen/dollar rate, like 122 yen/dollar in 2007), consumers pay more. This is because fewer yen are required to buy one U.S. dollar, making goods priced in yen more expensive when converted back to dollars.
As an example, if a Japanese car costs 2,000,000 yen, at an exchange rate of 133 yen/dollar, the car would cost about $15,038 in U.S. dollars. If the exchange rate later becomes 103 yen/dollar, the same car would now cost approximately $19,417 in U.S. dollars, assuming the price in yen hasn't changed. This scenario typically means that, with a stronger yen, U.S. consumers get more value for their dollar and can save money on imports, while a weaker yen means U.S. consumers have to spend more dollars to buy the same amount of goods from Japan.