Calculate the dollar price of a Big Mac (column 2), the implied PPP of the dollar (column 3) and the local currency under (-)/over (+) valuation (column 5) for a Big Mac in Britain and Mexico. (For Britain, please note that for the pound and for the euro, exchange rates are quoted as dollars per foreign currency. For Mexico, as for all the other currencies, exchange rates are quoted as foreign currency per dollar).

(Hint: Refer to Slide#9 in International Parity Conditions for a sample Big Mac table)

Calculate the dollar price of a Big Mac (column 2), the implied PPP of the dollar (column 3) and the local currency under (-)/over (+) valuation (column 5) for a Big Mac in Britain and Mexico. (For Britain, please note that for the pound and for the euro, exchange rates are quoted as dollars per foreign currency. For Mexico, as for all the other currencies, exchange rates are quoted as foreign currency per dollar). (Hint: Refer to Slide#9 in International Parity Conditions for a sample Big Mac table) In local currency In dollars Implied PPP of dollar Actual Exchange rate Local currency Under/over valuation 2.54 USA Britain Mexico Dollars ner nound $2.54 1.99 MXP21.9 1.43* 9.29 The dollar price of Big Mac in Britain is: (3 pts) $3.15 $2.60 $2.85 $4.15