1. A basket of goods costs $3,725 in the U.S. Exact same goods basket costs 3,136 in Europe. The exchange rate is .8725/$

A. How much cheaper/more expensive is the European basket (in dollars) than the dollar cost of the U.S. basket? (in percentage terms) Show work

B. How much cheaper/more expensive is the U.S. basket than the European basket? (in percentage terms) Show work

C. By what percentage amount would the euro need to appreciate or depreciate in order for absolute PPP to hold? (please indicate whether it needs to appreciate or depreciate)