PART B. Answers should be typed up in this part and uploaded to the Turnitin assignment we created on Moodle. You should also email both parts to us per our instructions above. B1. Do not use any formulas in your answer to this question! Suppose Lebanese inflation rate is high (~50 percent over one year), and the inflation rate in EU is low. According to the relative PPP, what should happen over the year to the Lebanese pound's ER against the Euro? Make sure you use only words in your answer, and explain what purchasing power parity is. What is the difference between its absolute and relative versions? B2. Explain why the Economist magazine decided to improve its Big Mac Index by incorporating differences in standards of living across countries. In your answer, explain what Big Mac index is and how one can use this index to measure how over- or under- valuation of a currency