Assume that Japan and the United States are engaged in a system of flexible exchange rates. If more Japanese tourists decide to visit the United States for their vacations,

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When more Japanese tourists visit the United States, they convert yen into U.S. dollars, increasing the demand for dollars and the supply of yen in foreign exchange markets. This leads to the appreciation of the U.S. dollar and the depreciation of the yen.

Assume That Japan and the United States Are Engaged in a System