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Yen Market Dynamics
hard

When capital flows from Japan to the U.S., the increased supply of Yen leads to a decrease in its value, making Japanese goods _____ for U.S. consumers while making U.S. exports _____ for Japan.

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Learning Path
Learning Path

Question & Answer
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2
Review Options
3
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4
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Choose the Best Answer

A

more expensive; cheaper

B

cheaper; more expensive

C

equally priced; equally priced

D

less desirable; more desirable

Understanding the Answer

Let's break down why this is correct

Answer

When capital flows from Japan to the U. S. , it means that more Yen are being exchanged for U. S. dollars.

Detailed Explanation

When more Yen is available, its value drops. Other options are incorrect because This answer suggests Japanese goods become more expensive; This choice says prices stay the same.

Key Concepts

Yen exchange rate dynamics
Capital flows impact on trade
International economics
Topic

Yen Market Dynamics

Difficulty

hard level question

Cognitive Level

understand

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