Your family is planning a ski vacation to Mt$.$ Blanc in Chamonix, France, one year from now. Your family is based in the U$.$S$.$ and your home currency is the US dollar. Since this is a foreign currency expenditure, your parents have entrusted the budgeting in your expert hands. The chateau's owner wishes to preserve his real income against both inflation and exchange rate changes. So$,$ the present monthly rent of $10,000$ will be adjusted upwards or downwards for any change in the French cost of living between now and then. You are basing your budgeting on purchasing power parity $($PPP$).$ French inflation is expected to average at $3\mathrm{.}5000\%$ for the coming year, while the inflation in the U$.$S$.$ is expected to be at $2\mathrm{.}5000\%.$ The current spot rate is $$1\mathrm{.}1840/.$

$1.$ Why will your dollar cost go up$?$