24)A bundle of goods in Japan costs 3,961,200 while the same goods and services cost $36,500 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 5 percent in Japan and 9 percent in the United States, what will the goods cost next year?

Cost of Goods

Japan

United States

$

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c.

Will the dollar depreciate or appreciate relative to the yen over this time period?

	Depreciate
	Appreciate