Business, 20.04.2020 19:56 zoey1223

ECONOMICS- EXCHANGE RATE- HELP
Suppose that on January 1, the Yen price of the dollar is 95 (C$1= ¥100). Over the year, the Japanese inflation rate is 5%, and the Canadian inflation rate is 7%. At the end of the year, the exchange rate is C$1 = ¥98.

(a) Based on this information is Yen undervalued or overvalued according to PPP? Explain.
(b) What happened to the real exchange rate? Explain.

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ECONOMICS- EXCHANGE RATE- HELP
Suppose that on January 1, the Yen price of the dollar is 95 (C...

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