Suppose the Price of a Big Mac in New York

question 12

Multiple Choice

Suppose the price of a Big Mac in New York is $3.00 and the price of a Big Mac in Paris is $3.75 at the prevailing euro/dollar exchange rate,then according to PPP the euro is:

• A)undervalued by 25 percent against the dollar.
• B)overvalued by 25 percent against the dollar.
• C)appreciating relative to the dollar.
• D)depreciating relative to the dollar.

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Definitions:

Bipedality

The ability to walk upright on two legs, a key feature distinguishing humans and some other species from quadrupedal animals.

Selective Pressures

The environmental factors that favor certain phenotypes over others, influencing an organism's ability to survive and reproduce.

Human Lineage

The evolutionary path leading to and including Homo sapiens, marked by significant milestones such as bipedalism and complex tool use.

Leakey's Hypothesis

A theory proposing that the development of bipedalism in human ancestors was driven by ecological changes that favored standing and walking on two legs.