If U.S. prices increase with no change in Japanese prices, the demand for yen would:
A) increase.
B) decrease.
C) remain the same.
D) decrease at an increasing rate.
E) decrease at a decreasing rate.

Question

Quizplus · Accepted Answer

If U.S. prices increase while Japanese prices remain unchanged, U.S. goods become relatively more expensive compared to Japanese goods. This would lead to an increase in demand for Japanese goods, and consequently, an increase in demand for yen to purchase those goods.

If US Prices Increase with No Change in Japanese Prices, the the Demand