a) Go to the Federal Reserve Economic Data (FRED) website. Collect and plot the quarterly, period average US dollar/Euro exchange rate since 2000 . Collect, and plot on the same diagram, the quarterly average CPI for the US, divided by the quarterly average CPI for the Euro area. (Both series are available in FRED. For ease of interpretation, you could normalize both series to equal 100 in the year 2000.) b) Compute the correlation between the nominal exchange rate and ratio of CPIs, and their relative standard deviations. Do this exercise for both the levels and growth rates (or log differences) of the nominal exchange rate and CPI ratio. Describe your results, referencing the Michael Mussa paper we have mentioned in class. c) Also construct the real exchange rate and plot it on a separate diagram and construct the growth rate of the real exchange rate and plot it on a separate diagram. d) Based on your plots and statistics, what can you say about the role of absolute and relative purchasing power parity for US-Euro area real exchange rate determination? a) Go to the Federal Reserve Economic Data (FRED) website. Collect and plot the quarterly, period average US dollar/Euro exchange rate since 2000 . Collect, and plot on the same diagram, the quarterly average CPI for the US, divided by the quarterly average CPI for the Euro area. (Both series are available in FRED. For ease of interpretation, you could normalize both series to equal 100 in the year 2000.) b) Compute the correlation between the nominal exchange rate and ratio of CPIs, and their relative standard deviations. Do this exercise for both the levels and growth rates (or log differences) of the nominal exchange rate and CPI ratio. Describe your results, referencing the Michael Mussa paper we have mentioned in class. c) Also construct the real exchange rate and plot it on a separate diagram and construct the growth rate of the real exchange rate and plot it on a separate diagram. d) Based on your plots and statistics, what can you say about the role of absolute and relative purchasing power parity for US-Euro area real exchange rate determination