If over the next year the inflation rate in the euro area is higher than the inflation rate in Japan, then the euro should depreciate relative to the Japanese yen.
举一反三
- As of today, the spot exchange rate is €1.00 = $1.60 and the rates of inflation expected to prevail for the next year in the U.S. is 2% and 3% in the euro zone. What is the one-year forward rate that should prevail? ( ) A: €1.00 = $1.6157 B: €1.6157 = $1.00 C: €1.00 = $1.5845 D: $1.00 × 1.03 = €1.60 × 1.02
- In 2012,U.S.core inflation was 2.1 percent. This inflation rate A: is lower than the inflation rate the Fed accepts as creating stable prices. B: is about equal to the inflation rate the Fed accepts as creating stable prices. C: is more than 2 percentage points higher than the inflation rate the Fed accepts as creating stable prices. D: None of the above answers are correct because the Fed has never associated an inflation rate with stable prices.
- If the rate of inflation in the United States is 4% and the rate of<br/>inflation in the United Kingdom is 3%, relative purchasing power<br/>would predict that( ) A: the pound will appreciate relative to the dollar. B: the pound will depreciate relative to the dollar. C: both the dollar and the pound will depreciate due to inflation. D: both the dollar and the pound will appreciate due to inflation.
- If the inflation rate in the United States is higher than that in Germany and productivity is growing at a slower rate in the United States than it is in Germany, in the long run, _________
- If this year's price level exceeds last year's, A: the inflation rate between these years has been positive. B: the inflation rate is accelerating. C: deflation is occurring. D: no relative price changes are occurring.