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If the USInflation Rate Is 3 Percent Annually and the Japanese Inflation

Question 28

Multiple Choice

If the U.S.inflation rate is 3 percent annually and the Japanese inflation rate is 1 percent annually,by what percent would the dollar price of the yen need to change according to purchasing power parity?


A) Appreciate by 2 percent
B) Appreciate by 1 percent
C) Depreciate by 2 percent
D) Appreciate by 3 percent
E) Depreciate by 1 percent.

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