What Do You Expect to Happen to Prices in Japan

question 16

Multiple Choice

What do you expect to happen to prices in Japan, given nominal interest rates of 10% in the United States and 6% in Japan, and expected U.S. inflation of 6%?

• A) Expected Japanese inflation is 1.79%.
• B) Expected Japanese inflation is 2.15%.
• C) Expected Japanese inflation is 6.22%.
• D)Expected Japanese inflation is 10.00%.

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