Question: The inflation rate in the U.S. is 2%, while the inflation rate in Japan is 10%. The current exchange rate for the Japanese yen ()

The inflation rate in the U.S. is 2%, while the inflation rate in Japan is 10%. The current exchange rate for the Japanese yen () is $0.0092. After supply and demand for the Japanese yen has adjusted in the manner suggested by purchasing power parity, the new exchange rate for the yen will be: (Points : 3.5)

$0.0099. $0.0085. $0.0082. $0.0096.

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