If, because of Japan's high saving rate (in excess of domestic investment spending), Japan invests overseas, then this investment can cause __________ of the Japanese yen And thus a consequent trade __________ for Japan.

Question

Quizplus · Accepted Answer

If Japan invests overseas, this investment can cause a depreciation of the Japanese yen because it will increase the demand for foreign currencies. This will make Japanese exports cheaper and imports more expensive, leading to a trade surplus for Japan.

If, Because of Japan's High Saving Rate (In Excess of Domestic