Suppose That the Price of a Big Mac Is a Good

question 146

Essay

Suppose that the price of a Big Mac is a good approximation of the price level in the country. A Big Mac costs
£2 in London and $3 in New York.
a) If purchasing power parity holds, what is the exchange rate between the U.S. dollar and the British pound?
b) If the current exchange rate is $1.6 per pound, what is the dollar price of a Big Mac in London? What do you predict will happen to the exchange rate? Explain.
c) The exchange rate between the U.S. dollar and the Russian ruble is 30 rubles per dollar. If purchasing power parity holds, what is the price of a Big Mac in Moscow?

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Definitions:

Excessive Sexuality

An unusually high interest in or engagement in sexual activities, which may interfere with daily functioning or social relationships.

Paraphilic Behavior

Sexual interests, fantasies, or behaviors involving unusual objects, activities, or situations that may cause distress or impairment in functioning.

Psychiatric Term

A phrase or word used specifically in the field of psychiatry to describe, diagnose, or treat mental health conditions.

Bestialists

People who have sexual contact with animals but are not concerned with the animals’ welfare.