Which example of market expectations causes the dollar to appreciate 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) More rapid money supply growth than Japan
D) Higher inflation rates than Japan

Question

Quizplus · Accepted Answer

Higher future interest rates in the U.S. would cause an increase in demand for the dollar as investors seek to earn higher returns. This increased demand would cause the value of the dollar to appreciate against the yen.

Which Example of Market Expectations Causes the Dollar to Appreciate