The Eonomist's Big Mac Index (May 2010) Suggests That Against

question 77

Multiple Choice

The Eonomist's Big Mac index (May 2010) suggests that against the dollar, the Chinese yuan is:

• A) trading fairly, since the Big Mac prices are similar.
• B) quite undervalued, since the Chinese Big Mac is almost 50 percent less expensive than the U.S.-dollar Big Mac.
• C) is overvalued, since the Big Mac sells for almost 50 percent less in Chinese currency than in U.S. dollars.
• D) trading at a historical premium.

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