The Decline in the Value of the Yen in 2014

question 228

Multiple Choice

The decline in the value of the yen in 2014 and 2015 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 yen and bought U.S.dollars
• B)sold Japanese yen and sold U.S.dollars
• C)bought Japanese yen and sold U.S.dollars
• D)bought Japanese yen and bought U.S.dollars

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Definitions:

Predatory Dumping

A practice where a company exports a product at a price significantly lower than its normal value, with the intention to drive out competition in the import country.

Sporadic Dumping

Occurs when a company exports a product at a price significantly lower than the price in its domestic market, but does so irregularly or occasionally.

Rent Seeking

The practice of gaining wealth without creating new wealth or value, often through manipulation of the social or political environment.

Rent Seeking

The activity of individuals or entities that seek to gain wealth through the manipulation of public policy or government allocation rather than through trade and the production of added value.