As of today, S($/)=1.60 and the rates of inflation expected o prevail for the next year in the U.S. is 2% and 3% in the Euro Zone. Assume that the U.S. \$ actually appreciates by 3.5%, resulting in a real exchange rate of 0.96. In that ase, we may conclude that: 1. The competitiveness of Euro Zone will deteriorate in world export market. 2. The U.S. Dollar appreciated by more than is warranted by PPP. 3. The Euro depreciated by less than is warranted by PPP. 4. The U.S. will have an advantage in world export market