Please answer fast please arjent help please Under the theory of purchasing powerparity, suppose that inflation in the Japanincreases by 30% and inflation in U.S.increases by 10%. Then this results inSelect one:а.an appreciation of the yen by an amountthat depends upon what happens to thereal exchange rate.b.a 20% appreciation of the yen.С.a 20% appreciation of the dollar.d.an appreciation of the dollar by an amountthat depends upon what happens to thereal exchange rate.

Purchasing power parity is based on extension and variation of prices.

Answered: parity, suppose that inflation in the…

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parity, suppose that inflation in the Japan ncreases by 30% and inflation in U.S. ncreases by 10%. Then this results in

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question

Please answer fast please arjent help please

Under the theory of purchasing power
parity, suppose that inflation in the Japan
increases by 30% and inflation in U.S.
increases by 10%. Then this results in
Select one:
а.
an appreciation of the yen by an amount
that depends upon what happens to the
real exchange rate.
b.
a 20% appreciation of the yen.
С.
a 20% appreciation of the dollar.
d.
an appreciation of the dollar by an amount
that depends upon what happens to the
real exchange rate.

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