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Suppose that a Big Mac costs 6.6 NZ dollar in Auckland, New Zealand (NZ) and 4.5 eu Paris, France. If the nominal exchange rate

 

Suppose that a Big Mac costs 6.6 NZ dollar in Auckland, New Zealand (NZ) and 4.5 eu Paris, France. If the nominal exchange rate is 1.8 NZ dollar per euro, the NZ dollar is overvalued. O McDonald's New Zealand should import Big Macs from Paris. a Big Mac is cheaper in Auckland than in Paris. O a Big Mac is cheaper in Paris than in Auckland.

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