Explore BrainMass
Share

Teo factors that affect the dollar/yen exchange rate

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

In the flexible exchange rate system, discuss the effects of the following events on the exchange rate between U.S. dollar and Japanese Yen: Please indicate whether US$ will appreciate or depreciate.

A) Other things being equal, the trade deficit between U.S. and Japan increased, or the U.S. imports from Japan increased faster than U.S. exports to Japan.

B) Other things being equal, the U.S. real interest rate increased faster than Japanese real interest rate.

© BrainMass Inc. brainmass.com October 25, 2018, 5:01 am ad1c9bdddf
https://brainmass.com/economics/exchange-rates/teo-factors-that-affect-the-dollar-yen-exchange-rate-404233

Solution Preview

A) Americans will want to buy more yen so they can pay for the imports. The demand for Japanese yen ...

Solution Summary

This solution describes how a change in the U.S./Japan trade deficit and a change in real interest rates would affect the dollar/yen exchange rate.

$2.19
See Also This Related BrainMass Solution

Study analysis of the Blades, Inc.

See attached file for full problem.

Prepare a case study analysis of the Blades, Inc.

1. Explain factors that affect foreign exchange rates.

2. Summarize the case and answer questions 1-6.

View Full Posting Details