The increase in interest rates as a result of the government of Japan running a

Question

The increase in interest rates as a result of the government of Japan running a budget deficit will: O A. cause an increase in the value of the Yen relative to other currencies and therefore increase imports and increase exports O B. cause an increase in the value of the Yen relative to other currencies and therefore increase imports and decrease exports. O C. cause a decrease in the value of the Yen relative to other currencies and therefore increase imports and decrease exports O D. cause an increase in the value of the Yen relative to other currencies and therefore decrease imports and decrease exports Click to select your answer

Explanation / Answer

cause an increase in the value of the yen relative to other currencies and therefore increase imports and decreasec exports

the above is the answer

because interest rates raises demand of currency which would raise value of yen and higher value of yen would decrease exports.

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