51. Assume that the United States faces an 8 percent inflation rate while no (zero) inflation exists in Japan. According to the purchasing power parity theory, over the long run the dollar would be expected to:
A. appreciate by 8 percent against the yen
B. depreciate by 8 percent against the yen
C. remain at its existing exchange rate
D. any of the above
option B.
USD would depreciate by 8 percent against the yen