Task: One type of toy bears is in China and exported to the US. A toy bear sells for 16 Yen in China. The exchange rate of Chinese yen and US dollars is $1 = 8 Yen.
Problem 1: What will be the price of this toy bear in US dollars?
Problem 2: Suppose the US demand for this toy bear is D = 100- 10*P. P is the price in US dollar, what is the quantity of US demand for this toy bear?
Problem 3: If the Chinese yen is depreciated by 20%. This means Chinese yen is worth 80% of its previous value compared to US dollar. What will be the US quantity of demand for this toy bear?
Problem 4: What conclusion you can make on the impact of exchange rate on exports?