If the price level increases by 1% in Japan, while the US price level increases by 10%, then Purchasing Power Parity predicts that the US dollar will ___ versus the Japanese yen:

Question 23 options:

	appreciate by about 9%
	depreciate by about 10%
	depreciate by about 8%
	depreciate by about 9%
	appreciate by about 8%
	appreciate by about 10%

If interest rates increase by 1% in the Euro area while they increase by 0.5% in the US, theory predicts that demand for euro assets will ___ and the euro will _____.

Question 24 options:

	increase, depreciate
	increase, appreciate
	decrease, depreciate
	decrease, appreciate