Suppose a Big Mac Costs $4

question 3

Multiple Choice

Suppose a Big Mac costs $4.20 in Canada and 9.55 zlotys in Poland.If the exchange rate is 2.77 zlotys per dollar,purchasing power parity predicts that

• A) the dollar is undervalued.
• B) the zloty is undervalued.
• C) the zloty is overvalued.
• D) both the dollar and the zloty are undervalued.

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