Under a Floating Exchange Rate System, Everything Remaining Constant, an Increase

question 9

Multiple Choice

Under a floating exchange rate system, everything remaining constant, an increase in European exports to Japan is most likely to result in:

• A)a decrease in the demand for euro in the foreign exchange market.
• B)a decrease in the supply of euro in the foreign exchange market.
• C)an appreciation of the Japanese yen vis-à-vis the euro.
• D)an appreciation of the euro vis-à-vis the Japanese yen.

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Definitions:

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