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The Brooklyn Times starts the bagel currency Index. A bagel with cream cheese in Brooklyn cost $1.75. That same bagel cost 1.50 in Paris, France.

The Brooklyn Times starts the bagel currency Index. A bagel with cream cheese in Brooklyn cost $1.75. That same bagel cost 1.50 in Paris, France.

  1. a. Find that Bagel Purchasing Power Parity $/ exchange rate.
  2. b. The current exchange rate is 1.10 $/. Is the Euro overvalued or undervalued? Explain.

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