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In 2010 U.S. GDP was 14.5 trillion $ and Thai GDP was 9.5 trillion baht. Assume that actual dollar exchange rate is 15 baht for
In 2010 U.S. GDP was 14.5 trillion $ and Thai GDP was 9.5 trillion baht. Assume that actual dollar exchange rate is 15 baht for 1 dollar. Calculate PPP exchange rate by using the Big Mac index if you know that the price of a Big Mac is $5 in the US and 80 baht in Thailand. It can be concluded that Thai baht is Question 1 options: A) Overvalued B) Undervalued C) Actual dollar exchange rate is the same as PPP exchange rate based on the Big Mac index D) There is not enough information to answer this
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