Other Things Equal, Under a Floating Exchange Rate System, an Increase

question 129

Multiple Choice

Other things equal, under a floating exchange rate system, an increase in U.S.imports of Japanese goods will cause a demand for Japanese yen to

• A) increase, inducing a depreciation in the yen.
• B) decrease, inducing a depreciation in the yen.
• C) increase, inducing an appreciation in the yen.
• D) decrease, inducing an appreciation in the yen.

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Definitions:

Ambiguity

The quality of being open to more than one interpretation; vagueness or uncertainty.

Small Business

An independently owned and operated company that is limited in size and in revenue depending on the industry.

Strategic Standpoints

Positions or perspectives taken with the intention of achieving long-term goals or objectives.

Flexibility

The ability of an individual or organization to adapt to changes, challenges, or unexpected circumstances in a prompt and efficient manner.