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The table below contains economic, financial, and business indicators from 2015: Forecasting the Pan-Pacific Pyramid: Australia, Japan, and the United States Industrial Unemployment Gross Domestic

The table below contains economic, financial, and business indicators from 2015:

Forecasting the Pan-Pacific Pyramid: Australia, Japan, and the United States

Industrial

Unemployment

Gross Domestic Product

Production

Rate

Forecast

Forecast

Country

Latest Qtr

Qtr

2015e

2016e

Recent Qtr

Latest

Australia

4.3

%

3.8

%

4.1

%

3.5

%

4.6

%

4.2

%

Japan

1.6

%

-1.2

%

2.0

%

1.9

%

4.3

%

3.8

%

United States

1.9

%

3.8

%

2.0

%

2.2

%

1.9

%

4.7

%

Consumer Prices

Interest Rates

Forecast

3-month

1-yr Govt

Country

Year Ago

Latest

2015e

Latest

Latest

Australia

4.0

%

2.1

%

2.4

%

6.90

%

6.23

%

Japan

0.9

%

-0.2

%

0.0

%

0.73

%

1.65

%

United States

2.1

%

2.8

%

2.8

%

4.72

%

4.54

%

Trade

Balance

Current Account

Current Units (per US$)

Last 12 mos

Last 12 mos

Forecast 15

Country

(billion $)

(billion $)

(% of GDP)

Oct 17th

Year Ago

Australia

-13.0

-47.0

-5.7

%

1.12

1.33

Japan

98.1

197.5

4.6

%

117.00

119.00

United States

-810.7

-793.2

-5.6

%

1.00

1.00

Note: Unless otherwise noted, percentages are percentage changes over one year. Rec Qtr = recent quarter. Values for 2015e are estimates or forecasts.

Use the table above to answer the following question.

Assuming International Fischer applies to the coming year, forecast the following future spot exchange rates using the government bond rates for the respective countrycurrencies:

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

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