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Question 4 1.2 points Save Ans Suppose only two goods: good A and good Bare consumed in Australia and Europe. Assume the following: i. I unit of A costs $150 in Australia ii. 1 unit of B costs $300 in Australia ili. The law of one price holds for both good A and good B iv. In Europe, good A and good Beach account for 50%% of the aggregate consumption expenditure. Hence the European government constructs the EU Price Index as 0.5*(Price of A in Euros) + 0.5 (Price of B in Euros) v. In Australia, good A and B account for 80%% and 20%% of the aggregate consumption expenditure respectively. Hence the Australian government constructs the AU Price Index as 0.8"(Price of A in AUD) + 0.2*(Price of B in AUD) If E=1.5, choose the most appropriate option: @A. The EU price index = (337.5, the AU price index in AU = $180; Absolute PPP' does not hold @B. The EU price index = (150; the AU price index in AU = $225; Absolute PPP holds @:C. The EU price index = 6150, the AU price index in AU = $180; Absolute PPP does not hold @D. The EU price index -(150, the AU price index in AU = $180; Absolute PPP holds @E. The EU price index - (225; the AU price index in AU = $120; Absolute PPP holds