The exchange rate between the U.S. dollar and the Japanese yen is floating freely-both governments do not intervene in t

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The Exchange Rate Between The U S Dollar And The Japanese Yen Is Floating Freely Both Governments Do Not Intervene In T 1 (44.14 KiB) Viewed 15 times

The exchange rate between the U.S. dollar and the Japanese yen is floating freely-both governments do not intervene in the market for each currency. Suppose a large trade deficit with Japan prompts the United States to impose quotas on certain Japanese products imported into the United States and, as a result, the quantity of these imports falls. The decrease in spending on Japanese products will have no effect on spending on U.S.- made goods. Why? O A. The exchange rate is freely floating OB. The law requires this to occur. OC. U.S. goods are substitutes for Japanese goods OD. The trade deficit requires this to occur. decrease increase have no effect on