Choose 5 countries from those presented in the following link: By country | FRED | St. Louis
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Question:
- Choose 5 countries from those presented in the following link:
By country | FRED | St. Louis Fed. (n.d.). https://fred.stlouisfed.org/categories/158Links to an external site.
- There you will find the time series of exchange rates, i.e., the US dollar price in each country. Choose the exchange rate for a specific year or month at the group's discretion.
- Choose two products marketed in each of these 5 countries that are either produced or created and patented in the United States (similar to the Big Mac). These products should not be close substitutes (be different). Briefly present the characteristics of the chosen products and if there are differences in each individual product between countries.
- Find the prices of those goods in each country's currency in the year or month you chose in part 2. Google.com is a good tool to find those prices.
- With all this information, compute the parity exchange rate (PPP) mentioned above and indicate whether the domestic currency is overvalued or undervalued concerning the US dollar. In total, you should have 6 countries, the United States plus the 5 you chose.
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