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Between 1982 and 2006, the yen/$ exchange rated moved from yen249.05/$ to yen116.34/$. During this same 25-year period, the consumer price index (CPI) in Japan
Between 1982 and 2006, the yen/$ exchange rated moved from yen249.05/$ to yen116.34/$. During this same 25-year period, the consumer price index (CPI) in Japan rose from 80.75 to 97.72 and the US CPI rose from 56.06 to 117.07.
a.If PPP had held over this period, what would the yen/$ exchange rate have been in 2006?
b.What happened to the real value of the yen in terms of dollars during this period?
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