If the equilibrium exchange rate between U.S. dollars and Japanese yen is $0.01 = 1 yen, but currently the exchange rate is $0.009 = 1 yen, then with flexible exchange rates the dollar price of a yen will __________ and the yen will __________
A) increase; appreciate
B) decrease; appreciate
C) increase; depreciate
D) decrease; depreciate
A
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