Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increased foreign investment in Japanese technology companies.
B
A rise in Japan's interest rates relative to France's.
C
A decrease in Japan's exports due to a stronger Yen making goods more expensive abroad.
D
A surge in tourism to Japan increasing demand for Yen.
E
The expectation of a recession in Japan leading to decreased consumer confidence.
Understanding the Answer
Let's break down why this is correct
Answer
The appreciation of the Japanese Yen means that its value increases compared to other currencies. This can happen when more people want to buy Yen, which can be influenced by various factors. For example, if Japan's economy is doing very well, more investors may want to invest in Japanese companies, leading them to buy Yen to make those investments. Additionally, if interest rates in Japan rise compared to other countries, it can attract foreign investors seeking higher returns, which also boosts the demand for Yen. Lastly, if there are global uncertainties, investors often seek safe-haven currencies like the Yen, causing its value to rise as more people buy it.
Detailed Explanation
Other options are incorrect because More foreign investment doesn't always raise the Yen's value; Higher interest rates in Japan compared to France might not help the Yen.
Key Concepts
Foreign Exchange Market Dynamics
Currency Appreciation
Investment Flows
Topic
Foreign Exchange Market Dynamics
Difficulty
hard level question
Cognitive Level
understand
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