Question
Fill in the blanks in the following table. Suppose that Big Mac Meal price is USD$5.99. Local price means Big Mac Meal price in the
Fill in the blanks in the following table. Suppose that Big Mac Meal price is USD$5.99. Local price means Big Mac Meal price in the listed countries in their respective currencies. FX rate is the spot rate of USD1 in those currencies. Which of these currencies undervalued? Which ones overvalued? Country Currency Code Local Price FX Rate (USD1=) Implied
Rate of PPP for each country
Dollar valuation for each country
Switzerland CHF 6.5 0.9085 Australia AUD 6.48 1.2978 New Zealand NZD 6.8 1.3825 Mexico MXN 54 20.8554 Norway NOK 52 8.6661 Japan JPY 390 106.60 Argentina ARS 320 89.7506 Kuwaiti Dinar KWD 2.29 0.3026
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