Problem 4 (25 points) You are assigned to check whether the relative version of the purchasing power parity holds. Using data provided to you for the period 1973-2015 (see Excel file), prepare a brief report on the following question: Does the purchasing power parity hold for the British poundUS dollar exchange rate? Among other things you need to do the following: 1. Plot past exchange rate changes against differential inflation rates between Britain and the United states. 2. Using Excel, regress the percentage exchange rate changes on the inflation rate differential to estimate the intercept and the slope coefficient. Provide an interpretation of the regression results. Problem 4 (25 points) You are assigned to check whether the relative version of the purchasing power parity holds. Using data provided to you for the period 1973-2015 (see Excel file), prepare a brief report on the following question: Does the purchasing power parity hold for the British poundUS dollar exchange rate? Among other things you need to do the following: 1. Plot past exchange rate changes against differential inflation rates between Britain and the United states. 2. Using Excel, regress the percentage exchange rate changes on the inflation rate differential to estimate the intercept and the slope coefficient. Provide an interpretation of the regression results