The demand curve for Japanese yen will shift to the right when
A) there is a decrease in demand for Japanese-made goods in the United States.
B) there is no change in the demand for Japanese-made goods in the United States.
C) there is a decrease in the demand for U.S.-made goods in Japan.
D) there is an increase in the demand for Japanese-made goods in the United States.

Question

Quizplus · Accepted Answer

An increase in the demand for Japanese-made goods in the United States would lead to an increase in the demand for Japanese yen, as U.S. consumers would need to buy yen in order to purchase the Japanese goods. This would shift the demand curve for Japanese yen to the right. A decrease in demand for Japanese-made goods in the United States (A) or no change in demand for Japanese-made goods (B) would not shift the demand curve. A decrease in the demand for U.S.-made goods in Japan (C) would not have a direct impact on the demand for Japanese yen.

The Demand Curve for Japanese Yen Will Shift to the Right