Suppose That the U

question 26

Multiple Choice

Suppose that the U.S.dollar price of a Big Mac is $3.57.The price of a Big Mac in China is 12.5 yuan.Suppose that the current exchange rate is 6.83 yuan per dollar.If absolute PPP holds,the PPP-implied exchange rate is _______ and yuan is ________.

• A) 3.50 yuan per dollar; overvalued.
• B) 3.50 yuan per dollar; undervalued.
• C) 1.83 yuan per dollar; overvalued.
• D) 1.83 yuan per dollar; undervalued.

---

Definitions:

X-ray Diffraction

A technique used to determine the atomic and molecular structure of a crystal, by measuring the angles and intensities of X-rays that are scattered by the crystal.

Watson

Refers to James Watson, who, along with Francis Crick, Maurice Wilkins, and Rosalind Franklin, is credited with discovering the double helix structure of DNA.

Crick

Francis Crick, a British molecular biologist, biophysicist, and neuroscientist, known for co-discovering the structure of DNA along with James D. Watson.

Griffith's Transformation

A process discovered by Frederick Griffith in 1928, demonstrating that a substance from dead bacteria could genetically transform living bacteria.