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Using the diagram in exercise 5, illustrate the effect of a change in tastes that prompts Japanese residents to buy more goods from the United States. If the exchange rate is floating, what will happen to the foreign exchange market equilibrium?

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Using the diagram in exercise 5, illustrate the effect of a change in tastes that prompts Japanese residents to buy more goods from the United States. If the exchange rate is floating, what will happen to the foreign exchange market equilibrium?

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