On a foreign exchange market diagram with dollars on the horizontal axis and the yen price of the dollar on the vertical axis,the shape of the demand curve depends on the ________ and capital ________.

Question

Quizplus · Accepted Answer

The demand curve for dollars in terms of yen depends on the Japanese demand for U.S. goods (since they need dollars to purchase these goods) and capital inflows to the United States (as investments in the U.S. require converting yen to dollars).

On a Foreign Exchange Market Diagram with Dollars on the Horizontal