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Assume the spot exchange rate is 106.90 Japanese yen per U.S. dollar. If the inflation...

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Accounting

Assume the spot exchange rate is 106.90 Japanese yen per U.S. dollar. If the inflation rate in the U.S. is expected to be 2% and the inflation rate in Japan is 1% for the next two years, then the:

exchange rate will increase.

exchange rate will double.

dollar will appreciate relative to the yen.

dollar will become more valuable.

Yen will strengthen against the dollar.

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