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Assume that the export price of a Toyota Corolla from Osaka, Japan, is1151018 . The exchange rate is87.44/$. The forecast rate of inflation in the
Assume that the export price of a Toyota Corolla from Osaka, Japan, is1151018 . The exchange rate is87.44/$. The forecast rate of inflation in the United States is 1.5 % per year and in Japan it is 2.2 % per year. Assuming purchasing power parity holds, what would be what will be the dollar price of a Corolla in one year?
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