The current price level in the U.S. is $14,000 per consumption bundle, and 10,000 perconsumption bundle in the U.K.. The current exchange rate is $1.65/. The annual inflation rate isexpected to be 2% in the U.S. and 5% in the U.K. If is going to weaken against dollar by 3.6% inthe next year, discuss how is the absolute purchasing power and relative purchasing power of dollargoing to change. Which country will become more competitive in the world market? Explain.