Which of the following combinations would be most likely to increase U.S. imports from Japan and reduce U.S. exports to Japan?
A)Contractionary monetary policy in both the United States and Japan
B)Expansionary monetary policy in both the United States and Japan
C)Contractionary monetary policy in the United States and expansionary monetary policy in Japan
D)Expansionary monetary policy in the United States and contractionary monetary policy in Japan

Question

Quizplus · Accepted Answer

Expansionary monetary policy in the U.S. would likely weaken the U.S. dollar, making imports from Japan cheaper. Contractionary monetary policy in Japan would strengthen the yen, making U.S. exports to Japan more expensive.

Which of the Following Combinations Would Be Most Likely to Increase