Suppose the exchange rate of the Japanese yen to the U$.$S$.$ dollar is $110.$ If in a given

year, the inflation rate in Japan is $1\mathrm{.}4\%$ and the inflation rate in the U$.$S$.$ is $2\mathrm{.}2\%,$ the

theory of purchasing power parity predicts that the U$.$S$.$ dollar will

appreciate

depreciate

neither appreciate nor depreciate