Everything else the same, if the price level in Japan rises relative to the price level...
Everything else the same, if the price level in Japan rises relative to the price level in the U.S.,
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a. the supply of dollars and the demand for yen in the foreign exchange market will decrease. |
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b. the supply of dollars and the demand for yen in the foreign exchange market will increase. |
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c. the demand for dollars and the supply of yen in the foreign exchange market will decrease. |
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d. the yen will appreciate. |
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e. the dollar will depreciate. |
Please help asap!
Thank you!
Homework Answers
Ans) the correct option is e. the dollar will depreciate.
if the price level in Japan rises relative to the price level in the U.S., net exports in US will increase because of increased exports and decreased imports.
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