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Calculate inflation rates in us and europe

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Reference no: EM132796697

CPI (US )       CPI (Europe)                    Exchange Rate

                                (US)                    (Europe)             

2000     100                        85                                          $ 1.40/€

2010      140                        120                                         $ 1.30/€

1) Calculate inflation rates in US and Europe between 2000 and 2010.

2) According to PPP, was the € overvalued or undervalued against the $ in 2010? By how much?

Reference no: EM132796697

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