Asked by
Shary Raymundo
on Nov 26, 2024
Verified
Under flexible (floating)exchange rates, a U.S. trade deficit with Japan will eventually cause the dollar price of yen to rise.
Flexible Exchange Rates
A currency system where the value of a currency is allowed to fluctuate according to the foreign exchange market.
Trade Deficit
The amount by which a nation’s imports of goods (or goods and services) exceed its exports of goods (or goods and services).
- Analyze the mechanisms of stable versus variable exchange rate systems.
- Grasp the influence of trade balances on the economic health of countries and currency valuations.
Verified Answer
ML
Learning Objectives
- Analyze the mechanisms of stable versus variable exchange rate systems.
- Grasp the influence of trade balances on the economic health of countries and currency valuations.
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