Figure 19.3
-Refer to Figure 19.3. The market for yen is currently at Point A. An increase in the U.S. interest rates causes the equilibrium to move to point _______ and the U.S. dollar will _______.

Question

Quizplus · Accepted Answer

An increase in the U.S. interest rates causes a higher demand for U.S. dollars, which in turn causes the U.S. dollar to appreciate. As a result, the equilibrium will move to point C, where the exchange rate is higher (i.e., more U.S. dollars per yen).

Figure 19.3 -Refer to Figure 19.3. the Market for Yen Is Currently