Recall Application 1, "The Chinese Yuan and Big Macs," to Answer

question 189

Multiple Choice

Recall Application 1, "The Chinese Yuan and Big Macs," to answer the following questions:
-According to the application, the actual dollar- yuan exchange rate was 6.8 yuan per U.S. dollar and the predicted purchasing power exchange rate (using the Big Mac) in China is 3.49 yuan. If the exchange rates were to adjust so that the Law of One Price were achieved, then the:

• A) the yuan will depreciate.
• B) the Big Mac will depreciate.
• C) US dollar will appreciate.
• D) yuan will appreciate.

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Definitions:

False Belief Task

A psychological test used to assess a child's understanding that other people can hold beliefs about the world that are incorrect.

Domain of Biology

A branch of science concerned with the study of living organisms and their interactions with each other and their environments.

Heredity

The biological transmission of characteristics from one generation to the next.

Theory of Mind

The ability to attribute mental states—beliefs, intents, desires, emotions, knowledge—to oneself and others, and to understand that others have beliefs, desires, and intentions different from one's own.