Assume the U

question 20

Multiple Choice

Assume the U.S. government wants to hold the value of the dollar at $1.00 U.S. equals 100 Japanese yen, but it finds that the value of yen is appreciating against the U.S. dollar. What would be an appropriate policy to reverse this trend?

• A)Buy more Japanese goods.
• B)Buy U.S. dollars.
• C)Sell U.S. dollars.
• D)Encourage U.S. investments abroad.

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Definitions:

Investment

The action of allocating resources, usually money, with the expectation of generating an income or profit.

Bond Buyer

An investor who purchases bonds, which are securities that represent a loan made by the investor to the bond issuer.

Saving Rate

The proportion of disposable income that is not spent on consumption but reserved for future use or investment.

Living Standards

refer to the quality and quantity of goods and services available to individuals or societies, reflecting their economic prosperity and quality of life.