Question: I got a right, but need help with b. A bundle of goods in Japan costs 3,326,500 while the same goods and services cost $34,000

I got "a" right, but need help with "b".

A bundle of goods in Japan costs 3,326,500 while the same goods and services cost $34,000 in the United States.

a.

If purchasing power parity holds, what is the current exchange rate of U.S. dollars for yen? (Round your answer to 4 decimal places. (e.g., 32.1616))

Current exchange rate 0.0102 $ per yen
b.

If, over the next year, inflation is 9 percent in Japan and 5 percent in the United States, what will the goods cost next year?

Cost of Goods
Japan

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!