In considering the market for yen and dollars, when the dollar depreciates,

Question

Quizplus · Accepted Answer

When the dollar depreciates, it takes more dollars to purchase the same amount of yen, increasing the demand for yen and causing the yen to appreciate in value. Option B is incorrect because a depreciating dollar does not dictate a depreciating yen. Option C is incorrect because it implies that either outcome is possible, but the appreciation of the yen is the most likely scenario. Option D is not necessarily true and is therefore incorrect in this context.

In Considering the Market for Yen and Dollars, When the Dollar