From base price levels of 100 in January 2000, Japanese and U.S. price levels in December 2017

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From base price levels of 100 in January 2000, Japanese and U.S. price levels in December 2017 stood at 123 and 191, respectively.

a. If the January 2000 $:¥ exchange rate was $0.007692, what should the exchange rate be in December 2017?

b. In fact, the exchange rate in December 2017 was ¥1 = $0.008880. What might account for the discrepancy? (Price levels were measured using the consumer price index.)


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Multinational Financial Management

ISBN: 9781119559900

11th Edition

Authors: Alan C Shapiro, Paul Hanouna

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