3.- If the price of a basket of goods measured in USD is 10% lower in France than in USA, which countrys currency is undervalued according to the purchasing power parity?

4.- You observe that the inflation rate in the United States is 2.3 percent per year and that T-bills currently yield 2.9 percent annually. What do you estimate the inflation rate to be in:

Japan if short-term Japanese government securities yield -0.1 percent per year?

Canada if short-term Canadian government securities yield 3.5 percent per year?

Mexico if short-term Mexican government securities yield 7.8 percent per year?