Assume that the Japanese government tightens its controls on imports by Japanese companies. Other things being...

Assume that the Japanese government tightens its controls on imports by Japanese companies. Other things being equal, how should this affect the (a) U.S. demand for Japanese yen, (b) supply of yen for sale, and (c) equilibrium value of the yen?

Solutions

Expert Solution

a)Japan shall import lesser, hence the exports from Us will become less and therefore demand for USD to pay for these exports shall fall thereby rising value of Yen vis a vis dollar.

b)Supply of Yen shall remain same until government print money.

c)Equillibrium value of Yen shall rise because demand for USD to pay for these exports shall fall thereby rising value of Yen vis a vis dollar.

jeff jeffy answered 2 years ago

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