The U.S. dollar exchange rate, e, where e is the nominal exchange rate expressed as Japanese yen per U.S. dollar, will appreciate when:

A. U.S. consumers increase their preference for Japanese cars.
B. the Bank of Japan tightens monetary policy.
C. real GDP in the U.S. increases.
D. the U.S. Federal Reserve tightens monetary policy.


Answer: D

Economics

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