If the rates of return in China are 3% while the rates of return in Japan are 3.5% then the Japanese yen will __________ and the quantity of yen bought and sold in the foreign exchange market will __________.

Respuesta :

If the ROR in China are 3% while the ROR in Japan are 3.5% then the Japanese yen will appreciate and the quantity of yen bought and sold in the foreign exchange market will increase, decrease or remain unchanged.

Give a brief account on foreign exchange market.

A global over-the-counter (OTC) decentralized market for trading currencies is known as the foreign exchange market (Forex, FX, or currency market). The exchange rates on this market are determined for each currency. Included is the full process of buying, selling, and exchanging currencies at predetermined or real-time prices. It is the biggest market in the world by a wide margin, closely followed by the credit market in terms of trade volume.

Larger international banks make up the majority of the market players. Aside from weekends, financial hubs all around the world serve as the focal points for trading amongst a variety of different types of buyers and sellers every single day. Due to the frequent trading of pairs of currencies, the foreign exchange market determines a currency's relative worth rather than its absolute value by determining the market price of one currency when compared to another.

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