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8. Inflation is expected to be 2.5% per year in the USA and 1.5% per year in Japan. If the current FX rate is 110/$,

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8. Inflation is expected to be 2.5% per year in the USA and 1.5% per year in Japan. If the current FX rate is 110/$, what will be the FX rate in one year according to RPPP? 9. In the above example (FX = 110\/S), if the price of a Big Mac in USA is $4.25 and the price in Japan is 400, how much is the yen overvalued against the APPP FX rate

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