If the Bank of Japan (the Japanese central bank)were to take steps to devalue the yen in foreign currency markets,the Japanese ________ curve would shift rightward in the short run and the Japanese ________ curve would shift leftward in the long run.

Question

Quizplus · Accepted Answer

In the short run, a devalued yen makes Japanese goods cheaper for foreign buyers, increasing aggregate demand. In the long run, the cost of imported goods rises, potentially reducing short-run aggregate supply.

If the Bank of Japan (The Japanese Central Bank)were to Take