In the foreign exchange market,a decrease in the world demand for Japanese exports
A) shifts the demand curve for yen leftward that causes the yen to depreciate
B) shifts the demand curve for yen leftward that causes the yen to appreciate
C) shifts the demand curve for yen rightward that causes the yen to depreciate
D) shifts the demand curve for yen rightward that causes the yen to appreciate

Question

Quizplus · Accepted Answer

A decrease in world demand for Japanese exports would lead to a decrease in demand for Japanese yen as buyers would need less yen to purchase Japanese goods. This would shift the demand curve for yen leftward, leading to a depreciation of the yen.

In the Foreign Exchange Market,a Decrease in the World Demand