Currencies - U.S. dollar foreign-excahnge rates. December 18. 2009.

Country/Currency in US$.............. per US$

Chinese Yuan 0.1466..............6.8213

Indian Rupee 0.0201.............49.7512

Euro 1.3265..............................0.7539

A Big Mac costs $3.27 in Boston and $2.69 in Paris. In this circumstance, what can we say is TRUE?

a. Purchasing power parity holds, and Big Macs are relatively cheap in Boston.

b. Purchasing power parity does not hold, and Big Macs are relatively cheap in Boston.

c. Purchasing power parity does not hold, and Big Macs are relatively expensive in Boston.

d. Purchasing power parity holds, and Big Macs cost the same in these two cities.

e. Purchasing power parity holds, and Big Macs are relativly expensive in Boston