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

question 35

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The "Big Mac Theory of Exchange Rates" tests the accuracy of the purchasing power parity theory.In July 2013,the Economist reported that the average price of a Big Mac in the U.S.was $4.56.In Sweden,the average price of a Big Mac at that time was 41.6 kronor.What is the "implied exchange rate" between Swedish kronor and U.S.dollars?


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