Based on purchasing power parity theory, should the Canadian currency, appreciate or depreciate? Please provide ample justification.

This the full question, no other information has been provided. I've attached a sample question and answer just like it.

Based on the purchasing power parity theory, should the Japanese Yen appreciate or depreciate? Please provide ample justification. Expert Answer soumya answered this 3,937 answers Was this answer helpful? Bi Po According to purchasing power parity future rate = spot rate * (1+inflation in Japan)/(1+inflation in foreign coutry). Since the inflation is Japan is lesser than that in the foreign country the future rate will be lower. This means that lesser number of Yen would be required to purchase per unit of foreign currency in the future. Comment >