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I could not find the solutions thank you3rd questiond)depreciate; 0.7083;overvalued Write your name and number at the polo The Aime allowed is of minutes, 1.

I could not find the solutions thank you3rd questiond)depreciate; 0.7083;overvalued

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Write your name and number at the polo The Aime allowed is of minutes, 1. Absolute purchasing power parity implies that Purchasing power of a dollar, when exchanged for TL and spent in Turkey is equal to that in US. b. The fall in the purchasing power of the TL in the Turkish market will be reflected in a proportional appreciation of the IL vis a vis the dollar. c. The TL price of a reference commodity basket, is the same in Turkey and in the US, d. All of the above are correct. e. Only (a) and (c) are correct. 2. In January 2014, a Big Mac sold for $4.62 in US and (3.66 in the Euro Area. The actual exchange rate was e0.74-$1 and the dollar price of the Big Mac in the Euro Area was $4.9%. Based on the law of one price, which of the following statements is the most accurate? a. The exchange rate implied by the PPP (Big Mac Index) equals 60.74=$1 and the Euro is neither overvalued nor undervalued. b. The exchange rate implied by the PPP (Big Mac Index) equals 60.79-$1 and the Euro is overvalued. c. The exchange rate implied by the PPP (Big Mac Index) equals el.262=$1 and the Euro is overvalued. d. The exchange rate implied by the PPP (Big Mac Index) equals (1.355=$1 and the Euro is underyzlued. year CPly Exchange rats DSWFr 2010 100.0 116 0.6753 8 2011' 99.3 121. 0.6898 7 The table chove shows the Consumer Price Index numbers in Switzerland and the UK for 2010 and 2011. The last column on the right shores the actual exchange rates le, the price of 1 SWFranc in terms of British Pounds. Consider the year 2010 to be the point of reference. If relative PPP is valid, the Swiss Franc in 201 1 should against the . British Pound and equal In 2011, the SWFr (actual exchange raid) is in relation to the relative PPP implied exchange rate. a appreciate, 0,6989; undervalued b. depreciate; 0.6422; overvalued c. appreciate, 0.7083; undervalued

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