LONS 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 6.83 6.83 -49 - 49 The price of a Big Mac in the US was 3.10$ in 2006, 3.41$ in 2007, 3.57% in 2008 and 2009. Fill in the blanks in the table above by answering the questions below. What is the actual exchange rate in 2007? Yuan 11.0/$ Yuan 9.2/$ Yuan 7.6/$ Yuan 6.4/$ 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 6.83 6.83 - 49 - 49 The price of a Big Mac in the US was 3.10$ in 2006, 3.41$ in 2007, 3.57% in 2008 and 2009. Fill in the blanks in the table above by answering the questions below. What is the Yuan (local currency) under/over valuation in 2007? O-58% 35% -49% O-52%