Figure 19.2

-Referring to Figure 19.2, the effect of an increase in Japanese interest rates is represented by a movement from point

Question

Figure 19.2
 
-Referring to Figure 19.2, the effect of an increase in Japanese interest rates is represented by a movement from point

Quizplus · Accepted Answer

According to Figure 19.2, an increase in Japanese interest rates results in a movement along the demand curve for Japanese yen, from point d to c. This is because the higher interest rates make it more attractive for foreign investors to hold their assets in yen, increasing the demand for yen and causing its exchange rate to appreciate. Therefore, the correct answer is C) d to c.

Figure 19.2 -Referring to Figure 19.2, the Effect of an Increase in of an Increase