Abenomics: In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy . The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics. Appreciation of Currency: It is referred as the rise in the value of a currency in comparison to other currencies. Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR. Depreciation of Currency: It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR. To explain: Reason for Abenomics resulting in a weaker yen.

Question

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Answer 1

Question

Chapter 19, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

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Answer 2

Question

Chapter 19, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

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Answer 3

Question

Chapter 19, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

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Answer 4

Question

Chapter 19, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

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Answer 5

Chapter 19, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

Answer 6

Chapter 19, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.

Depreciation made theexport relatively cheaper and the import relatively more expensive.

Answer 7

Chapter 19, Problem 1QFT

To determine

Concept Introduction:

Abenomics:

In Japan, when Mr. S became the prime minister, the country was going through a negative inflation. He followed the ease of monetary policy.

The bank of Japan ensured that it will do everything to bring back the inflation to 2%. All the economic policies taken by Mr. Sare referred as Abenomics.

Appreciation of Currency:

It is referred as the rise in the value of a currency in comparison to other currencies.

Consider a situation in which the value of one dollar is equal to INR 50. When it becomes equal to INR 60, it means the dollar has appreciated in comparison to INR.

Depreciation of Currency:

It is referred as the reduction in the value of a currency in comparison to other currencies. Consider a situation in which value of one dollar is equal to INR 50. When it becomes equal to INR 40, it means the dollar has depreciated in comparison to INR.

To explain: Reason for Abenomics resulting in a weaker yen.

Answer 8

Expert Solution & Answer

Explanation of Solution

Ease of monetary policy in Abenomics weakens the yen.

Due to quantitative easing policy followed by Mr. S, the money supply increased in the market which led to a lower interest rate.

Low interest rate led to a weakening of the financial account. It means there is a capital outflow. The demand for yen in the exchange rate market decreased, as a result,the price of yen decreased which is known as a depreciation of currency.