Purchasing Power Parity Forecasts. Use the table containing economic, financial, and business indicators to answer the following questions. Assuming purchasing power parity, and assuming that the forecasted change in consumer prices is a good proxy of predicted inflation, forecast the following exchange 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

Assuming purchasing power parity, and assuming that the forecasted change in consumer prices is a good proxy of predicted inflation, forecast the following exchange rates:

a. Japanese yen/U.S. dollar in one year

The forecast of the spot rate for Japanese yen/U.S. dollar in one year is /$. (Round to two decimalplaces.)

b. Japanese yen/Australian dollar in one year

The forecast of the cross rate for Japanese yen/Australian dollar in one year is /A$. (Round to two decimal places.)

c. Australian dollar/U.S. dollar in one year

The forecast of the spot rate for Australian dollar/U.S. dollar in one year is A$ /$. (Round to four decimalplaces.)

Forecasting the Pan-Pacific Pyramid: Australia, Japan, and the United States Industrial Production Unemployment Rate Gross Domestic Product Qur Latest Country Australia Japan United States Latest Qtr 4.9% 22% 2.8% 3.7 % -1.5% 3.9% Forecast 2015e 4.2 % 27% 27% Forecast 2016e 3.3 % 21% 2.9% Recent Qtr 4.1% 4.5 % 2.5% 4.4% 3.8 % 4.6 % Consumer Prices Forecast 1-Yr Govt Latest Country Australia Japan United States Year Ago 4.6 % 0.6% 24% Latest 2.5% -0.2% 23% 2015e 2.7% % 3.5 % Interest Rates 3 month Latest 6.84 % 0.65 % 4.67% 6.22% 167% 4.59% Current Units (per US$) Trade Balance Last 12 mos (billion $) -12.5 98.5 Current Account Last 12 mos (billion $) 46.1 Oct 17th Year Ago Forecast 15 (% of GDP) -5.5 % 4.5 % -5.4% Country Australia Japan United States 1.35 111 118 197.3 121 $10.1 -793.2 1 1 Note:Unless otherwise noted, percentages are percentage changes over one year. RecQtr=recent quarter. Values for 2015e are estimates or forecasts