6. If the U. S. and Japan engage in much capital flows but little trade, directly influences their exchange rate the most. If the U. S. and China engage in much trade but little capital flows, directly influences their exchange rate the most. A) interest rate differentials; inflation rate differentials B) inflation rate differentials; interest rate differentials C) income and interest rate differentials; inflation and income differentials D) inflation and income differentials; interest rate differentials E) None of the above