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To buy a six-pack of Diet Coke in Slabovia, you need 50 slabs (the local currency). The price of a Diet Coke six-pack in the
To buy a six-pack of Diet Coke in Slabovia, you need 50 slabs (the local currency). The price of a Diet Coke six-pack in the US is US$10. The current exchange rate between the dollar and the slab is 4 slabs-1 dollar. Using the methodology of the well-known Diet Coke Index, would you say that the slab is overvalued or undervalued with respect to the US dollar? By how much? 1
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