If there is a strong possibility that the dollar price of the Japanese yen will
ID: 2440448 • Letter: I
Question
If there is a strong possibility that the dollar price of the Japanese yen will fall in the next few months, which of the following would we expect to happen right now in the market for yen?
A. A rightward shift of the demand curve, a leftward shift of the supply curve, and an appreciation of the yen
B. A leftward shift of the demand curve, a leftward shift of the supply curve, and a depreciation of the yen
C. A rightward shift of the demand curve, a rightward shift of the supply curve, and an appreciation of the yen
D. A leftward shift of the demand curve, a rightward shift of the supply curve, and a depreciation of the yen.
E. A leftward shift of the demand curve, a rightward shift of the supply curve, and an appreciation of the yen
Explanation / Answer
As the Japanese Yen is expected to depreciate in the near future people will stop demanding it right now the demand curve will shift to the left. it will also shift the supply curve to the right further decreasing the value of the currency in the present market.
the answer is "D".