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1. In US, the price of a Big Mac is $4. In China, the price of a Big Mac is 12. What is the exchange

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1. In US, the price of a Big Mac is $4. In China, the price of a Big Mac is 12. What is the exchange rate of Chinese Yuan under purchasing power parity? What is the dollar price of Big Mac in China, if the actual exchange rate is $0.15/? Is the Chinese Yuan overvalued or undervalued? By how much? Over/undervaluation = (actual rate - PPP rate)/PPP rate Extra Credit: If the GDP of China is Y90 trillion in 2019, what is China's Normal GDP based on the actual exchange rate? What is China's Real GDP based on the PPP exchange rate? Both GDPs are in USD

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