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More expensive is the european basket

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Please ANSWER ALL the questions Not one of them !!!

1. A basket of goods costs $8,500 in the U.S. Exact same goods basket costs €7,200 in Europe. The exchange rate is €.8144/$.

A. What is the over/undervaluation of the €?

B. What is the over/undervaluation of the $?

2. Regarding Q1, how much cheaper/more expensive is the European basket (in dollars) than the dollar cost of the U.S. basket? (in percentage terms)

3. Regarding Q1, how much cheaper/more expensive is the U.S. basket than the European basket? (in percentage terms)

Reference no: EM131879459

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