Purchasing Power Parity Forecasts. Use the table containingeconomic, financial, and business indicators to answer the following questions. Assuming purchasing power parity, and assuming that the forecasted change in consumer prices is a good proxy of predicted inflation, forecast the following exchangerates:

a. Japanese yen/U.S. dollar in one year

b. Japanese yen/Australian dollar in one year

c. Australian dollar/U.S. dollar in one year

Forecasting the Pan-Pacific Pyramid: Australia, Japan, and the United States Industrial Unemployment Rato Gross Domestic Product Production Forecast Forecast Country Latest Qtr Qtr 2015e 2016e Recent Qtr Latest Australia 4.6 % 3.9 % 4.7 % 3.5 % 4.7 % 4.1 % Japan 1.7 % -1.2 % 2.7 % 1.6 % 4.8 % 3.9 % United States 2.1 % 3.9 % 2.7 % 2.2 % 1.5 % 4.7 % Consumer Prices Interest Rates Forecast 3-month 1-yr Govt Year Ago Latest 2015e Latest Latest 4.2 % 2.4 % 2.4 % 6.98 % 6.21 % Country Australia Japan United States 0.7 % -0.3 % 0.0 % 0.55 % 1.66 % 2.8 % 2.8 % 3.2 % 4.88 % 4.58 % Trade Balance Current Account Current Units (per USS) Last 12 mos Forecast 15 Last 12 mos (billion $) Oct 17th Year Ago Country Australia (billion $) -12.5 (% of GDP) -5.8 % -46.7 1.12 1.34 98.9 4.5 % 118.00 121.00 Japan United States 1972 -793.7 -810.9 -5.6 % 1.00 1.00 Note: Unless otherwise noted, peroentages are percentage changes over one year. Rec Qtr -recent quarter. Values for 2015e are estimates or forecasts