Other things equal, if American exports to Japan increase and American imports from Japan decrease, then under a floating exchange rate system, we would expect the dollar to:
A. Weaken against the Japanese yen.
B. Depreciate against the Japanese yen.
C. Devalue against the Japanese yen.
D. Strengthen against the Japanese yen.
Answer:D
Other things equal, if American exports to Japan increase and American imports from Japan decrease, then under a floating exchange rate system, we would expect the dollar to:
A. Weaken against the Japanese yen. B. Depreciate against the Japanese yen. C. Devalue against the Japanese yen. D. Strengthen against the Japanese yen.