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The "Big Mac Theory of Exchange Rates" Tests the Accuracy

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The "Big Mac Theory of Exchange Rates" tests the accuracy of purchasing power parity theory.In July 2011,The Economist reported that the average price of a Big Mac in the United States was $4.07.In Switzerland,the average price of a Big Mac at that time was 6.50 Swiss francs.If the exchange rate between the dollar and the Swiss franc was 0.93 Swiss francs per dollar,explain how it would be profitable to buy Big Macs in the United States instead of in Switzerland.


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Oil-Immersion Lens

A type of microscope lens used with a drop of oil to increase the resolution of the image seen through the microscope by reducing the refraction of light.

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A viscous liquid derived from petroleum, used as fuel and in various industrial applications, known also for its presence in seeds, fruits, and other parts of plants.

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A process of ensuring that products, services, or processes meet specific standards or requirements, often through systematic review and evaluation.

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The procedures and measures taken to ensure that a product or service meets specified requirements and standards before it is delivered to the customer.

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