_ 14. Suppose the spot exchange rate between the euro and the dollar is E$l = 1.29, while the purchasing power parity rate is 1.02. This implies: a. the dollar is overvalued with respect to the euro. 13. the cost of a European market basket converted to dollars is lower than the cost of the US. market basket. 0. on an average goods cost more in the US. than in Europe. (:1. the euro is overvalued with respect to the dollar. e. the dollar will buy more in other countries than in the US