The U.S. real interest rate rises relative to Japan's. As a result, A. the yen will...
The U.S. real interest rate rises relative to Japan's. As a result,
A. the yen will depreciate, and the dollar will appreciate.
B. both the dollar and the yen will appreciate.
C. the yen will appreciate, and the dollar will depreciate.
D. both the dollar and the yen will depreciate.
Homework Answers
A. is correct
When US real interest rate increases foreign investment to US increases which leads to increase in demand for US dollar.
This leads to appreciation of dollar and depreciation of yen.
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The U.S. real interest rate rises relative to Japan's. As a
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