The Demand Curve for Japanese Yen Is Downward Sloping Because

question 150

Multiple Choice

The demand curve for Japanese yen is downward sloping because when the exchange rate (measured in dollars per yen) falls,

• A) Japanese goods become relatively cheaper so foreigners buy more of them and need more yen to do so.
• B) foreigners need more dollars to buy one yen so they can now afford more Japanese goods.
• C) the yen demand curve shifts to the right as foreigners try to buy more Japanese goods.
• D) the dollar becomes weaker and this reduces the strength of both economies.
• E) everyone wants fewer yen because they have lost some of their underlying value.

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