A case study in the chapter analyzed purchasing-power parity for several countries using the price of Big Macs. Here are data for a few more countries:

Predicted Country Big Mac Rate Rate Indonesia 15,900 rupiah ____ rupiah/$ 9,015 rupiah/$
Hungary 600 forints ____ forints/$ 180 forints/$
Czech 52.9 korunas ____ korunas/$ 21.1 korunas/$
Republic Brazil 6.90 real ____ real/$ 1.91 real/$
Canada 3.88 C$ ____ C$/$ 1.05 C$/$

a. For each country, compute the predicted exchange rate of the local currency per U.S.
dollar. (Recall that the U.S. price of a Big Mac was $3.41.)

b. According to purchasing-power parity, what is the predicted exchange rate between the Hungarian forint and the Canadian dollar?
What is the actual exchange rate?

c. How well does the theory of purchasingpower parity explain exchange rates?