Asked by Abigail Dupont on May 08, 2024
Verified
In the dollar/yen market, if the supply of yen increases, other things being equal, the dollar will appreciate.
Dollar/Yen Market
The foreign exchange market involving the trading of US dollars and Japanese yen.
Appreciate
To increase in value or price, often in the context of financial investments or currency valuations.
- Gain insight into the relationship between inflation rates and their impact on foreign exchange markets and currency valuation.
- Absorb the significance of trade balances in shaping the economies of countries and influencing the values of currencies.
Verified Answer
RK
rafatu kasimuMay 11, 2024
Final Answer :
True
Explanation :
When the supply of yen increases relative to the dollar, it means there are more yen available for the same amount of dollars. This leads to a depreciation of the yen and an appreciation of the dollar, as it now takes more yen to buy a single dollar.
Learning Objectives
- Gain insight into the relationship between inflation rates and their impact on foreign exchange markets and currency valuation.
- Absorb the significance of trade balances in shaping the economies of countries and influencing the values of currencies.