If over the next year inflation is 8 percent in japan and 7


Question: A bundle of goods in Japan costs ¥4,235,000 while the same goods and services cost $31,200 in the United States.

a. If purchasing power parity holds, what is the current exchange rate of U.S. dollars for yen? (Round your answer to 4 decimal places. (e.g., 32.1616)) Current exchange rate $ per yen

b. If, over the next year, inflation is 8 percent in Japan and 7 percent in the United States, what will the goods cost next year? Cost of Goods Japan ¥ United States $

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Finance Basics: If over the next year inflation is 8 percent in japan and 7
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