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The business section of most major newspapers contains a table showing U.S. exchange rates. Find such a table and use it to answer the following questions.
a. Does this table show nominal or real exchange rates? Explain.
b. What are the exchange rates between the United States and Canada and between the United States and Japan? Calculate the exchange rate between Canada and Japan.
c. If U.S. inflation exceeds Japanese inflation over the next year, would you expect the U.S. dollar to appreciate or depreciate relative to the Japanese yen?
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