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Yen Market Dynamics
hard

Which of the following statements accurately describe the effects of capital flows from Japan to the U.S. on the Yen's value and international trade? Select all that apply.

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Choose the Best Answer

A

Increased capital flow from Japan to the U.S. leads to a depreciation of the Yen.

B

A weaker Yen makes Japanese goods more expensive for U.S. consumers.

C

Capital outflow from Japan can result in a stronger Yen against the dollar.

D

A depreciated Yen can boost Japanese exports by making them cheaper abroad.

E

A decrease in the Yen's value adversely affects U.S. exports to Japan.

Understanding the Answer

Let's break down why this is correct

Answer

When capital flows from Japan to the U. S. , it usually means that investors are buying American assets, like stocks or real estate. This increased demand for U. S.

Detailed Explanation

All the statements misunderstand how capital flows affect currency value and trade. Other options are incorrect because This suggests that sending money to the U.S; A weaker Yen means Japanese goods are cheaper for U.S.

Key Concepts

Exchange Rate Dynamics
Capital Flows
International Trade
Topic

Yen Market Dynamics

Difficulty

hard level question

Cognitive Level

understand

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