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

question 149

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The "Big Mac Theory of Exchange Rates" tests the accuracy of the purchasing power parity theory.In July 2015,the Economist reported that the average price of a Big Mac in the U.S.was $4.79.In Sweden,the average price of a Big Mac at that time was 43.7 kronor.What is the "implied exchange rate" between Swedish kronor and U.S.dollars?


Definitions:

Adenoids

Lymphatic tissue located in the nasopharynx that helps in immune defense against pathogens.

Axillary Lymph Nodes

Lymph nodes located in the armpit region that filter lymph and assist in the body's immune response.

Cardiovascular System

The body system comprising the heart and blood vessels, responsible for circulating blood to deliver oxygen and nutrients to tissues.

Lymphatic System

A network of tissues and organs that help rid the body of toxins, waste, and other unwanted materials, primarily involved in transporting lymph, a fluid containing infection-fighting white blood cells.

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