Under a Floating Exchange Rate System, an Increase in the International

Multiple Choice

Under a floating exchange rate system, an increase in the international demand for electronic appliances manufactured in Japan will result in:

A) Deflation in the Japanese economy.
B) An increase in Japan's trade deficit with other countries.
C) An appreciation of the yen vis-à-vis other currencies.
D) A depletion of international reserves held by the central bank of Japan.