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ASAPpleasethank you Assume that the exchange rate between the Japanese Yen and the Australian Dollar is JPY/AUD=0013 and the exchange rate between the Thai Baht

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Assume that the exchange rate between the Japanese Yen and the Australian Dollar is JPY/AUD=0013 and the exchange rate between the Thai Baht and the Australian Dollar is THB/AUD =0.047. a) What is the cross rate between the Thai Baht and the Japanese Yen, expressed as JPYITHB? Show your workings. ( 3 marks) b) Inflation is expected to be 4% in Japan, 8% in Thailand and 0% in Australia over the next year What JPY/THB exchange rate do you expect in one year's time? ( 2 marks) Did the Japanese Yen appreciate or depreciate? (1 mark) Calculate the percentage appreciation/depreciation. (1 mark) c) Explain in your own words why differences in inflation affect exchange rates. Use the term "purchase power" in your discussion. ( 3 marks)

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