Question: 10) The inflation rate in the US is 3% while the inflation rate in Japan is 10%. The current exchange rate for the Japanese yen

10) The inflation rate in the US is 3% while the inflation rate in Japan is 10%. The current exchange rate for the Japanese yen () is $0.0080. After supply and demand for the Japanese yen have adjusted in the manner suggested by purchasing power parity, the new exchange rate for the yen will be: a. $0.0078. b. $0.0074. c. $0.0085. d. $0.0070. 1

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