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Assume a simple world with two countries US and Japan. Japan is experiencing exponential growth in its national income, whereas US economy is stagnant. If

Assume a simple world with two countries US and Japan. Japan is experiencing exponential growth in its national income, whereas US economy is stagnant. If all other things are constant including interest rates, this will lead to____ in Japnese demand for U.S. goods, and as a result, the value of Yen should ____.

decrease; appreciate

decrease; depreciate

increase; depreciate

increase; appreciate

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