STEP: $4$ at $2$

Suppose that the real intersit rate in Japan and the U$.$S$.$ is $\backslash (3\mathrm{.}00*\backslash ).$ Furthernore, assume that the nominal $(1-$pear$)$ interest rate in lapan is $12\mathrm{.}50$ s while the haminal interest rate over the same time period is the United States is $4\mathrm{.}5015.$

According to the internabional Bither effect theory, the expected inflation rate in Japan is is while the expected inflation rate in the U$.$S$.$