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The Following Figure Depicts the Demand for Japanese Yen in the Foreign

Question 137

Multiple Choice

The following figure depicts the demand for Japanese yen in the foreign currency exchange market. Use this figure to answer the following questions. The following figure depicts the demand for Japanese yen in the foreign currency exchange market. Use this figure to answer the following questions.   -If Japanese cars become much more popular in the United States while simultaneously Japanese interest rates fall,we can expect that the demand for yen will A)  not shift. B)  be unpredictable,because the effects act in opposite directions. C)  either increase from D<sub>1</sub> to D<sub>2</sub> or decrease from D<sub>1</sub> to D<sub>3</sub>. D)  increase from D<sub>1</sub> to D<sub>2</sub>. E)  decrease from D<sub>1</sub> to D<sub>3</sub>.
-If Japanese cars become much more popular in the United States while simultaneously Japanese interest rates fall,we can expect that the demand for yen will


A) not shift.
B) be unpredictable,because the effects act in opposite directions.
C) either increase from D1 to D2 or decrease from D1 to D3.
D) increase from D1 to D2.
E) decrease from D1 to D3.

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