Author Question: Suppose a Japanese bank offers a 4 percent interest rate and U.S. banks offer a 2 percent interest ... (Read 149 times)

jrubin · **on:** Jun 29, 2018

Suppose a Japanese bank offers a 4 percent interest rate and U.S. banks offer a 2 percent interest rate. People must expect the yen to

A) depreciate by 2 percent.
B) appreciate by 2 percent.
C) depreciate by 6 percent.
D) appreciate by 6 percent.

Question 2

At the end of last year the Consumer Price Index was equal to 157.5 and at the end of this year it was equal to 163.8. What is the inflation rate over this time period?

A) 6.3 percent
B) 4.0 percent
C) 3.85 percent
D) 10.1 percent