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Question
Suppose the exchange rate between the U.S. dollar and the Japanese yen is initially 90 yen per dollar. According to relative purchasing-power parity, if the price of traded goods rises by 10 percent in the United States and remains constant in Japan, the exchange rate will become:
a. 72 yen per dollar
b. 81 yen per dollar
c. 99 yen per dollar
d. 108 yen per dollar
Answer
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Related questions
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