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Assume that the U . S . has a market for loanable funds - reflected by the graph associated with questions # 3 - 4
Assume that the US has a market for loanable funds reflected by the graph associated with questions # and a market for foreign exchange involving Japanese yen reflected by the graph associated with questions # Question # is based on this information.
Note that we will continue to assume P subscript F E end subscript equals fraction numerator $ over denominator Y e n end fraction ie dollars to yen
Assume that there is an increase in US government borrowing that affects the US market for loanable funds, but in turn affects the US market for foreign exchange with Japan.
Select every statement below which represents a correct statement about how this increase in borrowing will ultimately affect the US market for foreign exchange with Japan note that it is possible for there to be multiple correct answers
a
there will be an increase in DFE
b
there will be an increase in SFE
c
the dollar will appreciate relative to the yen
d
the dollar will depreciate relative to the yen
e
US goods and services will be more expensive for Japanese citizens
f
US goods and services will be less expensive for Japanese citizens
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