The inflation rate in the United States is 3 percent while the inflation rate in Japan is 10 percent.
The current exchange rate for the Japanese yen W) is $0.0075. After supply and demand for the Japanese yen have adjusted in the manner suggested by purchasing power parity, the new exchange rate for the yen will be:
a. $0.0076.
b. $0.0073.
c. $0.0070.
d. $0.0066.