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Unformatted text preview: strong, and the Yen was fixed, the Yen was undervalued, taking the dollar off the gold standard allowed the Yen to float. It increased in value 14% in one year. With prices of Japanese imports essentially skyrocketing, the short term demand went down. Less demand means less production, and the Japanese economy found itself in a hopeless tailspin. The long term significance of the Nixon shocks foreshadowed decades of trade tension between Japan and the U.S. The short term significant of the Nixon shocks plummeted the Japanese economy into a recession....
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- Winter '10