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Assuming ppp holds what is the exchange rate at the end of

The export price of a Japanese car is ¥5,000,000. The exchange rate is ¥125.00/$. Inflation is 3.0% per year in the U.S. and 1.0% in Japan, per year.

1. What is the price of the Japanese car at the beginning of the year in U.S. dollars?

2. Assuming PPP holds: What is the exchange rate at the end of one year?

3. Assuming 100% pass-through of exchange rate, what will the dollar price of the Japanese car be at the end of one year?

4. Assuming 60% pass-through, what will be the dollar price of the car at the end of one year?

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