Big Mac Index: January 2016 Local Price Actual Exchange Rate Dollar Price (Foreign currency) (Dollars per unit of foreign currency) (Dollars) The Eurozone 3.72 1.10 : Switzerland 6.50 1.02 [ ] United Kingdom 2.89 1.63 4.71 Poland 9.60 0.36 3.46 China 17.60 0.15 2.82 Source: "Currency Comparison, To Go,\" The Economist, last maodified January 7, 2016, accessad July 8, 2016, http://wvow.economist.com/blogs/graphicdatail/2016/01/daily-chart- 7. Purchasing-power parity (PPP) theory states that exchange rates would need to equalize the prices of goods in any two countries. For the dollar price of a Big Mac to be the same in both countries, a U.S. citizen would need to be able to convert $4.93 into exactly GBP 2.89. To find the exchange rate at which hamburger purchasing power is the same in both countries, divide the price in the United States by the price in the United Kingdom: PPP Ezchange Rate (U.S. Dollars per British pound) = oo $1.71 per pound The exchange rate that would have equalized the dollar price of a Big Mac in the United States and the Eurozone (that is, the PPP exchange rate for Big Macs) is W . This change would mean that the euro had W against the dollar. If Big Macs were a durable good that could be costlessly transported between countries, which of the following would present an arbitrage opportunity? Check all that apply. [J Exporting Big Macs from the Eurozone to the United States [J Exporting Big Macs from Switzerland to China [CJ Exporting Big Macs from Poland to China