Compute percentage change of real exchange rate

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Reference no: EM1372347

Q. Suppose at this time of last year exchange rate between US and Japan is 1 US Dollar worth 115 Japanese Yen. Now it becomes 1 US Dollar worth 95 Japanese Yen. Also suppose in past year inflation rate is about 3& in US but 0% in Japan. Compute percentage change of real exchange rate between US and Japan in past year. Has US Dollar become weaker or stronger in real term?

Reference no: EM1372347

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