Which of the following encourages Japanese investment in domestic U.S. markets? a. An increase in the...

Which of the following encourages Japanese investment in domestic U.S. markets?

a. An increase in the Yen to Dollar exchange rate.

b. Low real interest rates in the U.S.

c. Democratic government in the U.S.

d. All of the above.

Expert Solution

Option D.

All of the above encourages japanese investment in domestic US markets.
When the Yen to Dollar exchange rate increases, the exchange rate appreciates and the prices of US goods and services increases and the prices of Japanese goods and services decrease. This will decrease the US exports and encourage foreign investments from Japan.
Lower interest rates in US encourages japanese to invest in US more as they get higher returns and the cost of borrowing decreases due to lower rates.
Having democratic government is an important factor in attracting more FDI in terms of Higher competitiveness and acquiring newer technology.

Rahul Sunny answered 2 years ago

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