Table 19-1 Source: "The Big Mac Index," Economist,July 16,2015

question 68

Essay

Table 19-1
Source: "The Big Mac Index," Economist,July 16,2015.
-Refer to Table 19-1.Fill in the missing values in the above table.Assume the Big Mac is selling for $4.79 in the United States.Explain whether the U.S.dollar is overvalued or undervalued relative to each of the other currencies and predict what will happen in the future to each exchange rate.

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Definitions:

Money Economy

A system in which goods and services are traded using money as a medium of exchange rather than barter.

Barter Economy

An economic system where goods and services are exchanged directly for other goods and services without using money.

Double Coincidence

A situation in a barter system where two parties each hold an item the other wants, facilitating an exchange without the need for money.

Barter

The exchange of one good or service for another good or service; a trade.