Reduce interest rates to make it easier for businesses to obtain new loans and expand commerce.
Also, create tax inventives for desired business that would benefit say a nation that is on a coastal waterway. Offerring a reduction in taxes paid by corporations that import and export goods and services. This attracting more business.
Answer:
103.4709
Explanation:
The computation is shown below:
Given that
U.S inflation rate = 3%
Japan inflation rate = 1.5%
Current exchange rate = 105
Now the new exchange rate for the yen is
= Current exchange rate × (1 + Japan inflation rate) ÷ (1 + U.S inflation rate)
= 105 × (1 + 1.5%) ÷ (1 + 3%)
= 105 × (1.015 ÷ 1.03)
= 105 × 0.985436893
= 103.4709
