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If Canadian Inflation Is 4% While Japanese Inflation Is 7%,purchasing

Question 46

Multiple Choice

If Canadian inflation is 4% while Japanese inflation is 7%,purchasing power parity (PPP) theory predicts that the Japanese yen will ________ relative to the Canadian dollar.


A) depreciate by 11%
B) depreciate by 3%
C) appreciate by 3%
D) appreciate by 11%
E) appreciate by 28%

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