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4. (US) CPI (Europe) Exchange Rate CPI (US) (Europe) 100 140 2000 2010 85 120 $ 1.40/ $ 1.30/ 1) Calculate inflation rates in US

4. (US) CPI (Europe) Exchange Rate CPI (US) (Europe) 100 140 2000 2010 85 120 $ 1.40/ $ 1.30/ 1) Calculate inflation rates in US and Europe between 2000 and 2010. (3 point) 2) According to PPP, was the overvalued or undervalued against the Sin 2010? By how much? (3 points)

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