On March 30, 2012, the U.S. dollar was trading
at 82 yen per U.S. dollar on the foreign exchange
market. On August 30, 2012, the U.S. dollar
was trading at 79 yen per U.S. dollar.
a. What events in the foreign exchange market
could have brought this fall in the value of the
U.S. dollar?
b. Did the events you’ve described change the
demand for U.S. dollars, the supply of U.S.
dollars, or both demand and supply in the
foreign exchange market?
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