A Japanese automobile manufacturer building an auto plant in the United States creates a

Question

Quizplus · Accepted Answer

The Japanese automobile manufacturer will need to purchase U.S. dollars in order to invest in building the auto plant in the United States. This will create a demand for U.S. dollars in the foreign exchange market. At the same time, the company will be selling yen in order to obtain the necessary dollars, creating a supply of yen in the foreign exchange market.

A Japanese Automobile Manufacturer Building an Auto Plant in the United