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The inflation rate in the United States is 3 percent while the inflation rate in Japan is 10 percent. The current exchange rate for the

The inflation rate in the United States is 3 percent while the inflation rate in Japan is 10 percent.

The current exchange rate for the Japanese yen W) is $0.0075. After supply and demand for the Japanese yen have adjusted in the manner suggested by purchasing power parity, the new exchange rate for the yen will be:

a.$0.0076.

b.$0.0073.

c.$0.0070.

d.$0.0066.

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