The Decline in the Value of the Yen After 2012

question 277

Multiple Choice

The decline in the value of the yen after 2012 occurred as a result of the Japanese central bank,the Bank of Japan,following an expansionary monetary policy.Investors expected that the result would be lower nominal Japanese interest rates and a higher inflation rate.In response,investors ________,causing the value of the yen to decline against the dollar.

• A)sold Japanese financial assets and bought U.S.financial assets
• B)sold Japanese financial assets and sold U.S.financial assets
• C)bought Japanese financial assets and sold U.S.financial assets
• D)bought Japanese financial assets and bought U.S.financial assets

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Definitions:

Foreign Competition

The presence of competitors from other countries in a domestic market, highlighting the global nature of the market and challenges for local firms.

Tariffs

Taxes imposed on imported or, less commonly, exported goods, used by governments to regulate trade, protect domestic industries, or generate revenue.

Importing Products

The business activity of bringing goods or services into one country from another to sell them.

Domestic Markets

The supply and demand of goods and services within a single country.