Under a floating exchange rate system,an increase in U.S.imports of Japanese goods will cause the demand schedule for Japanese yen to:
A) Increase,inducing a depreciation in the yen
B) Decrease,inducing a depreciation in the yen
C) Increase,inducing an appreciation in the yen
D) Decrease,inducing an appreciation in the yen

Question

Quizplus · Accepted Answer

An increase in U.S. imports of Japanese goods will increase the demand for Japanese yen, as U.S. importers need to exchange dollars for yen to pay for the goods. This increased demand for yen will cause the yen to appreciate.

Under a Floating Exchange Rate System,an Increase in U