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5. Suppose the Japanese yen spot exchange rate is 1.32 yen per US dollar. If the US inflation is expected to be 3.2% per year,

5. Suppose the Japanese yen spot exchange rate is 1.32 yen per US dollar. If the US inflation is expected to be 3.2% per year, and the Japanese inflation is expected to be 2.8%. Then, one should expect the US dollar to appreciate relative to yen.

Question 5 options:

A) True

B) False

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