Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 31 - Part XI - Open-Economy Macroeconomics: Basic Concepts - Questions for Review - Page 679: 5

Answer

If the Fed starts printing large quantities of U.S. dollars, the number of Japanese yen a dollar could buy would decrease.

Work Step by Step

The U.S. money supply would increase while Japan's money supply would stay the same. Since there is increased supply of U.S. dollars, it would take more dollars to purchase the same quantity of yen.
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