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

If the U.S. economy is expected to grow faster than Japan's, it may lead to expectations of a trade deficit, as increased growth can lead to higher imports, causing the dollar to depreciate against the yen.

Which Example of Market Expectations Causes the Dollar to Depreciate