If a McDonald's Big Mac Cost $3

question 155

Multiple Choice

If a McDonald's Big Mac cost $3.06 in the United States and 3.21 euros in the Euro area, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar?

• A)1.05 If the value is less than this, it costs more dollars to buy a Big Mac in the U.S. than in the Euro area.
• B)1.05 If the value is less than this, it costs fewer dollars to buy a Big Mac in the U.S. then in the Euro area.
• C).95 If the value is less than this, it costs more dollars to buy a Big Mac in the U.S. than in the Euro area.
• D).95 If the value is less than this, it costs fewer dollars to buy a Big Mac in the U.S. than in the Euro area.

---

Definitions:

Types of Damages

Damages are monetary compensation awarded in civil litigation for loss or injury suffered by the plaintiff, and they can be classified into compensatory, punitive, special, and general damages.

Gross Negligence

A reckless disregard for the safety or lives of others, showing a substantial failure to perform any due diligence or take reasonable precautions.

Punitive Damages

Monetary compensation awarded to an aggrieved party, beyond actual damages, intended to punish the defendant and deter similar conduct.

Dog Running Free

The act of a dog moving freely in a public or private space without being restrained by a leash or confined area.