Suppose that from 2009 to 2014 (i e , five years), Japan 's yearly average inflation rate was 2 , and the U S yearly inflation rate averaged 2 5 If the spot exchange rate was 100 $ in 2009, use RPPP to determine the equilibrium exchange rate at the end of 2014 ...

RPPP states that the yen should have appreciated by about 45 each year bet ...

Suppose that from 2009 to 2014 (i.e., five years), Japan's yearly average inflation rate was -2%, and

Question:

Suppose that from 2009 to 2014 (i.e., five years), Japan's yearly average inflation rate was -2%, and the U.S. yearly inflation rate averaged +2.5%. If the spot was ¥100/$ in 2009, use RPPP to determine the equilibrium at the end of 2014.
Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...