If the interest rate on Japanese yen assets falls, the
A) demand for dollars will increase.
B) quantity of dollars demanded will increase.
C) demand for dollars will decrease.
D) quantity of dollars demanded will decrease.

Question

Quizplus · Accepted Answer

When the interest rate on Japanese yen assets falls, investors may seek higher returns elsewhere, increasing the demand for dollars to invest in U.S. assets.

If the Interest Rate on Japanese Yen Assets Falls, the