Question 1. PART B (4 points) The iTunes store, owned by Apple Inc. sells songs, movies and tv shows. These stores operate in several countries and the songs are priced in local currency terms. iTunes Song PPP exchange Current US$ Over (+)under (-) Over (+)under (-) Price Rate exchange rate valuation valuation (Local currency) (iTunes) (Big Mac)* USA USS 0.99 Australia A$1.69 A$1.70 A$1.33 +28% -21% Canada C$0.99 C$1 C$1.12 -1 1% +1% Japan V200 V202 Y1 12 +80% -28% UK 60.79 60.79 60.53 +51% +18% Source: The Economist What factor(s) could potentially explain the different prices charged for songs on iTunes? What advantage does the iTunes index have over the Big Mac index? (4 points