Figure 19-12

-Refer to Figure 19-12.Consider the market for U.S.dollars against the Japanese yen shown above.An event which could have caused the changes shown in the graph would be

Question

Figure 19-12
 
-Refer to Figure 19-12.Consider the market for U.S.dollars against the Japanese yen shown above.An event which could have caused the changes shown in the graph would be

Quizplus · Accepted Answer

A decrease in Japanese interest rates would make it less attractive for investors to hold yen, causing a decrease in the demand for yen and an increase in the supply of yen. This would cause the yen to depreciate relative to the U.S. dollar, leading to an increase in the exchange rate shown in the graph. Choices A, B, and C do not necessarily explain the changes shown in the graph.

Figure 19-12 -Refer to Figure 19-12.Consider the Market for U.S.dollars Against the for U.S.dollars