1a. In the foreign exchange market, a decrease in the world demand for Japanese exports a....
1a. In the foreign exchange market, a decrease in the world demand for Japanese exports
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1b. A relatively high rate of inflation in the United States will result in
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1c. The demand curve for euros in the foreign exchange market will increase (shift rightward) if
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1d. The theory of purchasing power parity states that changes in the nominal exchange rate arise from differences in ______ among countries.
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Homework Answers
1a.
B
When demand of yen increases then Yen appreciates. As a result, demand for the Japanese exports decreases.
1b.
D
The USD will depreciate, but in the short run due to the high inflation rate prevailing in the USA.
1c.
C
It will happen, because lower inflation in Europe, is due to higher interest rate and more demand of euro will take place.
1d.
B
It is the inflation rate difference.
Add Answer to:
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