Question

The article reference to a 'weaker yen' means that?

1) The company is facing financial difficulties
2) The company is experiencing a decline in sales
3) The company's profits are decreasing
4) The company's profits are increasing

Answer 1

A weaker yen means that the value of the Japanese yen is decreasing compared to other currencies. For a U.S. firm selling abroad, a weaker yen would result in the firm's profits increasing.

Step-by-step explanation:

A weaker yen means that the value of the Japanese yen is decreasing compared to other currencies. In terms of a U.S. firm selling abroad, a weaker yen would be beneficial because it means that when the firm converts its foreign earnings back into U.S. dollars, it will get more dollars in return. This would result in the firm's profits increasing, as measured in dollars.