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In US, the price of a Big Mac is $3.5. In China, the price of a Big Mac is 12. A. What is the exchange
In US, the price of a Big Mac is $3.5. In China, the price of a Big Mac is 12.
A. What is the exchange rate of Chinese Yuan under purchasing power parity?
B. What is the dollar price of Big Mac in China, if the actual exchange rate is $0.15/?
C. Is the Chinese Yuan overvalued or undervalued? By how much?
Over/undervaluation = (actual rate PPP rate)/ PPP rate
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Developments In Entrepreneurial Finance And Technology
Authors: David B. Audretsch, Maksim Belitski, Nada Rejeb, Rosa Caiazza
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