Suppose that Japan maintains a pegged exchange rate that overvalues the yen.Other things equal this would likely result in
A) Japanese exports becoming cheaper in world markets.
B) imports becoming expensive in the Japanese market.
C) unemployment for Japanese workers.
D) full employment for Japanese workers.

Question

Quizplus · Accepted Answer

An overvalued yen makes Japanese goods more expensive abroad, reducing demand for exports and potentially leading to unemployment in export-dependent industries.

Suppose That Japan Maintains a Pegged Exchange Rate That Overvalues