Multiple Choice
Suppose the exchange rate between the U.S.dollar and the Japanese yen is initially 90 yen per dollar.According to purchasing power parity,if the price of traded goods falls by 5 percent in the United States and rises by 5 percent in Japan,the exchange rate will become:
A) 72 yen per dollar
B) 81 yen per dollar
C) 99 yen per dollar
D) 108 yen per dollar
Correct Answer:
Verified
Correct Answer:
Verified
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