Question $30$

On $1/1/20$XX$,$ the expected annual inflation rate in the US is $5\mathrm{.}5\%$ and $2\mathrm{.}00\%$ in Japan. The current spot rate for the Japanese Yen $($JPY$)$ is $$0\mathrm{.}01111$ According to Purchasing Power Parity, the expected spot price for JPY on $\frac{1}{1}\frac{?}{20}1$ should be:

$$0\mathrm{.}01133$

$$0\mathrm{.}01149$

$$0\mathrm{.}01074$

$$0\mathrm{.}01111$

Question $31$

Suppose the price of JPY is $$0\mathrm{.}01125$ on $\frac{1}{1}\frac{?}{20}1.$ The net cash flow of a US exporter to Japan will:

Decrease

$$ Increase