1. 	I.	The Mexican Peso in undervalued. I am better off purchasing the Big Mac in Mexico.
   	II.	The Mexican Peso in undervalued. I am better off purchasing the Big Mac in the U.S.
   	III.	The Mexican Peso in overvalued. I am better off purchasing the Big Mac in Mexico.
   	IV.	The Mexican Peso in overvalued. I am better off purchasing the Big Mac in the U.S.

10 points

QUESTION 8

1. EUR/USD .70 in Real currency exchange rate terms. The same model of Nike shoes costs USD $130 in the U.S. and 185 Euros in Europe. Where am I better off buying the shoes?

   	I.	In Europe
   	II.	In the U.S.
   	III.	We don't have enough information to answer this question.
   	IV.	In Pakistan. Labor is cheaper in Pakistan.