The Inflation Rate in the Euro Area Is 3%, While

The inflation rate in the euro area is 3%, while the inflation rate in Japan is 1.3%. The current exchange rate for the Japanese yen (¥) is 0.007 euros. After supply and demand for the Japanese yen has adjusted in the manner suggested by purchasing power parity, the new nearest exchange rate for the yen will be:

A) 0.0071 euro.
B) 0.0075 euro.
C) 0.0074 euro.
D) 0.0131 euro.
E) none of the above.