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Use the table that follows to answer this question. Treat the country listed as the home country and the United States as the foreign country.
Use the table that follows to answer this question. Treat the country listed as the home country and the United States as the foreign country. Suppose the cost of the market basket in the United States is PUS = $190. Check to see whether purchasing power parity (PPP) holds for each of the countries listed, and determine whether we should expect a real appreciation or real depreciation for each country (relative to the United States) in the long run. Country Price of [5 FX currency (currency U.S. basket Real Is FX expected to measured in FX exchange Does PP currency have Real in FX (Pug times rate hold? overvalued or appreciation or units E59,) chmws (yes/ no) undervalued? depreciation? Brazil 2.1893 520 (real) India 46.66?2 12,000 (rupee) Mexico 11.0131 1,800 (peso) South Africa 6.9294 800 (rand) Zimbabwe 101,347 4,000,000
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