Data below contains the price of a BigMac in a variety of countries. The file also contains

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Data below contains the price of a BigMac in a variety of countries. The file also contains exchange rates relative to the US dollar. Assume the United Kingdom is the home country. Perform the following steps: a. Assuming that purchasing power parity, (i.e. law of one price) holds, calculate the ex- change rate implied/predicted by PPP for each country. b. Which currency is the most undervalued and most overvalued relative to the British Pound?Country Local Price Dollar Exchange Rate United Arab Emirates 18 3.67305 Argentina 590 129.115 Australia 6.7 1.448435689 Azerbaijan 4.7 1.69825 Bahrain 1.6 0.377 Brazil 22.9 5.39175 Canada 6.77 1.28915

Posted Date: Jun 21, 2024 10:08 AM

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Data below contains the price of a BigMac in a variety of countries. The file also contains

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