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in the 1990's japan tried to stimulate their economy by pushing the value of the yen...

in the 1990's japan tried to stimulate their economy by pushing the value of the yen down in the foreign exchange market and they sterilized the intervention. would it be successful?

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Answer #1

this can be successful to certain extent and this is because if you do value your currency what happens is that you would get less amount of foreign currency per unit of your currency as a result of which at same prices in your country the goods for foreign people will be less costly result of which you have to understand that demand for your goods will take place as a result of which the exports will increase and also the imports will become costlier because you will get less amount of foreign currency per unit of your currency as a result of which the imports in decrease and in this way due to increase in exports and decrease in imports it can be mentioned that balance of trade increases and this can increase the GDP of the country

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