Other things equal,if American exports to Japan are higher than American imports from Japan,then,under a floating exchange rate system,we would expect the dollar to appreciate against the yen.

Question

Quizplus · Accepted Answer

When a country exports more than it imports, its currency tends to appreciate in value under a floating exchange rate system. This is because there is an increase in demand for the exporting country's currency, which puts upward pressure on its value. Therefore, if American exports to Japan are higher than American imports from Japan, we would expect the dollar to appreciate against the yen.

Other Things Equal,if American Exports to Japan Are Higher Than