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Quelon 22 (4 points) THE FOLLOWING REFERS TO QUESTIONS 21-23 Consider the following table of data gathered from the Big Mac Index over the last few years: In local currency In dollar Implied PPP Actual Exchange rate Local currency Under/over valuation 58 8.03 2006 2007 2008 2009 Yuan 10.5 Yuan 11.0 Yuan 12.5 Yuan 12.5 1.31 1.45 1.83 1.83 3.23 3.5 3.5 - 49 6.83 6.83 -49 e price of Big Mac in the US was 3.108 in 2006, 3.419 in 2007, 3.57% in 2008 and 2009. in the blanks in the table above by answering the questions below. at is the actual exchange rate in 2007? 2009 15 The price of a Big Mac in the US was 3.108 in 2006, 3.415 in 2007, 18 Fill in the blanks in the table above by answering the questions below. What is the Yuan (local currency) under over valuation in 2007? 21 35% 24 -52% 27 0-58% 30 -49% Question 24 (5 points) Suppose the expected annual inflation rate in the UK is 4.5% and that in the US 3%. According to PPP, will the dollur appreciate or depreciate? By what percentage