A bundle of goods in Japan costs 2,065,300 while the same goods and services cost $24,100 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 7 percent in Japan and 5 percent in the United States, what will the goods cost next year?

Cost of Goods Japan United States $

c.

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

Appreciate Depreciate