Other things equal, increased exports of Japanese products to the United States will:
A. Increase the supply of Japanese yen in the foreign exchange market
B. Increase the demand for Japanese yen in the foreign exchange market
C. Increase the demand for U.S. dollars in the foreign exchange market
D. Have no effect on either the supply or demand for Japanese yen or American dollars
B. Increase the demand for Japanese yen in the foreign exchange market
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When the production of a good creates an external cost, one method of achieving the efficient allocation is to impose a tax such that
A) MC + tax = MSC. B) MC - tax = MSB. C) MB + tax = MSC. D) MB - tax = MSB.
The more capital a laborer works with, the more output the worker creates
Indicate whether the statement is true or false
The economy of Omega operates according to Okun's law. In Omega, the actual and the natural rates of unemployment equal 5 percent, and real GDP equals $10 trillion. What is potential GDP in Omega?
A. $10.5 trillion B. $9.5 trillion C. $9.0 trillion D. $10.0 trillion
Answer the following statement(s) true (T) or false (F)
1. When U.S. tourists go abroad, their use of hotels and other services is recorded in service exports in the current account. 2. A current account deficit in the U.S. balance of payments coincides with a financial account surplus. 3. If a U.S. resident obtains a loan from a foreign bank, the transaction is recorded in the financial account of the U.S. balance of payments. 4. When the U.S. balance of payments is zero, then the number of U.S. dollars demanded equals the number of U.S. dollars supplied. 5. A consumer in a foreign country who is buying U.S. goods must sell U.S. dollars to obtain foreign currency to pay for those goods.