4. In recent years China has been routinely accused of currency manipulation. In this question you are asked to use the freely available finder.com Starbucks Index to investigate these claims. Go to http://www.finder.com/starbucks-index to access the most recent version of their data. a. What is the most recent price of a Starbucks tall latte in China? What is the implied yuan/dollar exchange rate based on these prices? b. Does this measure suggest that the Chinese yuan is overvalued or undervalued relative to the dollar? Why might this be beneficial to the Chinese economy? c. The fundamental assumption of this index is that the cost of producing a Starbucks tall latte is identical across countries. Why might this assumption be violated? How might this violation affect your answer in part (b)? d. Which three countries are most undervalued relative to the U.S. dollar in the most recent year? Which three are most overvalued? 5. Suppose that two countries, Vietnam and Cote d'Ivoire, produce coffee. The currency unit used in Vietnam is the dong (VND). Cote d'Ivoire is a member of Communaute Financiere Africaine (CFA), a currency union of West African countries that use the CFA franc (XOF). In Vietnam, coffee sells for 4,500 dong (VND) per pound. The exchange rate is 30 VND per 1 CFA franc, EVND/XOF = 30. a. If the law of one price holds, what is the price of coffee in Cote d'Ivoire, measured in CFA francs? b. Assume the price of coffee in Cote d'Ivoire is actually 160 CFA francs per pound of coffee. Compute the relative price of coffee in Cote d'Ivoire versus Vietnam. Where will coffee traders buy coffee? Where will they sell coffee in this case? How will these transactions affect the price of coffee in Vietnam? In Cote d'Ivoire