From base price levels of 100 in 2000, Japanese and U S price levels in 2003 stood at 102 and 106, respectively a If the 2000 $ exchange rate was $0 007692, what should the exchange rate be in 2003 b In fact, the exchange rate in 2003 was 1 $0 008696 What might account for the discrepancy (Price le...

a If e 2003 is the dollar value of the yen in 2003 then according to purchasing power parity e 2003 ...

From base price levels of 100 in 2000, Japanese and U.S. price levels in 2003 stood at

Question:

From base price levels of 100 in 2000, Japanese and U.S. price levels in 2003 stood at 102 and 106, respectively.
a. If the 2000 $:¥ was $0.007692, what should the be in 2003?
b. In fact, the in 2003 was ¥ 1 = $0.008696. What might account for the discrepancy? (Price levels were measured using the consumer price index.)

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...