Please show ALL work!

Use the data in the table below to answer the following 3 questions.

Currencies U.S. dollar foreign-exchange rates. December 15, 2015

Country/currency in US$ per US$

British Pound 1.53468 0.6516

Norwegian Kroner 0.16900 5.9173

Thai Baht 0.03100 32.250

1. Suppose a Big Mac costs $3.27 in Boston, and 101 Thai Baht in Thailand. In this circumstance, what can we say is TRUE?

a.Purchasing Power Parity holds, and Big Macs are relatively cheap in Thailand

b.Purchasing Power Parity holds, and Big Macs are relatively expensive in Thailand

c.Purchasing Power Parity holds, and Big Macs cost the same in these two cities

d.Purchasing Power Parity does not hold, and Big Macs are relatively cheap in Thailand

e.Purchasing Power Parity does not hold, and Big Macs are relatively expensive in Thailand

2. Shelly is currently in Oslos airport, about to fly to Thailand. She has 500 Norwegian Kroner in her wallet. Which of the following comes closest to the number of Thai Baht she can receive?

a. 16,125

b. 2,725

c. 954

e.296

f.92

3.The price of an ounce of gold in New York is $1,000, and the price of the same ounce of gold in London (Britain) IS 651.6 British Pounds. Using the exchange rates above, what would likely occur in well-functioning markets based upon this information?

a.The price of gold will rise in New York and fall in London

b.The price of gold will rise in New York and will stay the same in London

c.The price of gold will fall in New York and rise in London

d.The price of gold will fall in New York and will stay the same in London

e.The price of gold will stay the same in both New York and London