Purchasing Power Parity Forecasts. Assuming purchasing power parity, and assuming that the forecasted change in consumer prices is a good proxy of predicted inflation, forecast the following cross-rates: a. Japanese yen/U.S. dollar in one year b. Japanese yen Australian dollar in one year c. Australian dollar/U.S. dollar in one year Unemployment Rate Latest 4.2% 3.8% 4.7% Forecasting the Pan-Pacific Pyramid: Australia, Japan and The United States Gross Domestic Product Industrial Production Forecast Forecast Country Latest Otr Qtr* 2007 2008 Recent Qtr Australia 4.3% 3.8% 4.1% 3.5% 4.6% Japan 1.6% -1.2% 2.0% 1.9% 4.3% United States 1.9% 3.8% 2.0% 2.2% 1.9% Consumer Prices Interest Rates Forecast 3-Month 1-Yr Govt Country Year Ago Latest 2007e Latest Latest Australia 4.0% 2.1% 2.4% 6.90% 6.23% Japan 0.9% -0.2% 0.0% 0.73% 1.65% United States 2.1% 2.8% 2.8% 4.72% 4.54% Trade Balance Curent Account Current Units (per U.S.$) Last 12 Mos Last 12 Mos Forecast 07 Country (billion $) (billion $) (% of GDP) Oct 17th Year Ago Australia -13.0 -$47.0 -5.7% 1.12 1.33 Japan 98.1 $197.5 4.6% 117 119 United States -810.7 -$793.2 -5.6% 1.00 1.00