18 points (6 points per section) 4. Chase Econometrics has just published projected inflation rates for the US and Germany for the next five years. US inflation is expected to be 3.5 percent and German inflation is expected to be 2.5 percent. a. If the current spot exchange rate is US$1.2684/e, what would you expect the spot rate to be in five years if purchasing power parity holds? If the nominal spot exchange rate in five years is still US$1.2684/e, what would real spot exchange rate be in five years? b. c. If part b above is accurate, what has happened to the real purchasing power of Europeans during that period relative to US citizens