Draw a demand for dollars curve. Label it D. Draw a supply of dollars curve . Label it S. Draw a point at the equilibrium quantity and exchange rate. Draw an arrow between the D and S curves that indicates a price at which there is a shortage of dollars. Label it When there is a shortage of dollars in the foreign exchange market, ------------. A. The demand for Japanese yen will increase so the foreign exchange market can move into equilibrium B. The supply of Japanese yen will increase so the foreign exchange market can move into equilibrium C. The forces of supply and demand pull the foreign exchange market into equilibrium D. Prices in the United States will fall relative to prices in Japan.
Draw a demand for dollars curve. Label it D. Draw a supply of dollars curve . Label it S. Draw a point at the equilibrium quantity and exchange rate. Draw an arrow between the D and S curves that indicates a price at which there is a shortage of dollars. Label it When there is a shortage of dollars in the foreign exchange market, ------------. A. The demand for Japanese yen will increase so the foreign exchange market can move into equilibrium B. The supply of Japanese yen will increase so the foreign exchange market can move into equilibrium C. The forces of supply and demand pull the foreign exchange market into equilibrium D. Prices in the United States will fall relative to prices in Japan.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Draw a
Draw a supply of dollars curve . Label it S.
Draw a point at the equilibrium quantity and exchange rate.
Draw an arrow between the D and S curves that indicates a price at which there is a shortage of dollars. Label it
When there is a shortage of dollars in the foreign exchange market, ------------.
A. The demand for Japanese yen will increase so the foreign exchange market can move into equilibrium
B. The supply of Japanese yen will increase so the foreign exchange market can move into equilibrium
C. The forces of supply and demand pull the foreign exchange market into equilibrium
D. Prices in the United States will fall relative to prices in Japan.
Transcribed Image Text:160
140-
120
100
60
40-
Exchange rate (yen per U.S. dollar)
12
1-5
16
Quantityillions ofU.S. dollars per day
N
Q
18
>>> Draw only the objects specified in the question,
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