Which example of market expectations causes the dollar to depreciate against the yen? Expectations that the U.S.economy will have
A) faster economic growth than Japan.
B) higher future interest rates than Japan.
C) less rapid money supply growth than Japan.
D) lower inflation rates than Japan.

Question

Quizplus · Accepted Answer

Faster economic growth in the U.S. compared to Japan could lead to a higher demand for yen as investors and businesses exchange dollars for yen to invest or purchase goods and services in Japan, causing the dollar to depreciate against the yen.

Which Example of Market Expectations Causes the Dollar to Depreciate