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QUESTION 7 Suppose you observe that the spot rate between yen and euros on 3/1/2018 was 120/ and on 4/1/2018 the spot rate was 125.

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QUESTION 7 Suppose you observe that the spot rate between yen and euros on 3/1/2018 was 120/ and on 4/1/2018 the spot rate was 125. According to relative PPP, which of the following is true? O Expected inflation in both nations was constant. O Expected inflation rose faster in the Eurozone than in Japan. O Expected inflation rose faster in Japan than in the Eurozone. Relative PPP assumes there is no relationship between changes in the spot rate and differences in expected inflation between nations

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