If the Japanese buy more Cadillacs, they __________ more yen and __________ more dollars in the foreign exchange market.
A) supply; supply
B) supply; demand
C) demand; supply
D) demand; demand

Question

Quizplus · Accepted Answer

When the Japanese buy more Cadillacs, which are priced in dollars, they need to exchange their yen for dollars. This means they supply yen and demand dollars in the foreign exchange market.

If the Japanese Buy More Cadillacs, They __________ More Yen