Because of the United States' long-standing trade deficit with Japan,the supply of U.S.dollars in Japan has increased.Which of the following is true about this situation?

Question

Quizplus · Accepted Answer

With an increase in the supply of U.S. dollars in Japan, the value of the U.S. dollar will decrease in terms of the yen (assuming all else equal). This means that goods from the U.S. will become relatively cheaper for Japanese consumers, which will increase demand for U.S. goods and ultimately reduce the trade deficit. Trade restrictions may have some short-term impact, but in the long run, they are not the only solution to reducing the trade deficit. Option C is also incorrect as it assumes that Japan will continue to gain economic strength, which may not necessarily be true. Option D is too vague and uncertain to be a valid answer.

Because of the United States' Long-Standing Trade Deficit with Japan,the