The nominal exchange rate (E) between the U.S. dollar and the Japanese yen is currently about 82 yen per dollar. If E goes from 82 to 72 over the next year, and the price levels is the two countries do not change, then which of the following is most likely?

A. U.S. NX will increase as imports increase and exports decrease.

B. U.S. NX will decrease as imports increase and exports decrease.

C. Japanese NX will increase as imports decrease and exports increase.

D. Japanese NX will increase as imports decrease and exports increase.

Answer rating: 100% (QA)

C Japanese NX will increase as import... View the full answer