Question
City Price of the magazine Paris 6.25 New York $7.50 Tokyo 770 Pairs Spot USD/EUR $1.14/ JPY/USD 113/$ JPY/EUR 128.82/ According to the law of
| City | Price of the magazine |
| Paris | 6.25 |
| New York | $7.50 |
| Tokyo | 770 |
| Pairs | Spot |
| USD/EUR | $1.14/ |
| JPY/USD | 113/$ |
| JPY/EUR | 128.82/ |
According to the law of one price, explain whether the USD is over- or under-valued versus the EUR? And by how much (round the calculated percentage at the 4th digit after the decimal, such as 0.1234%) (6 points).
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Public Finance
Authors: Harvey S Rosen, Ted Gayer
9th International Edition
0071267883, 9780071267885
