Question: Given the following data, for each country compute the fundamental value of the exchange rate as predicted by purchasing power parity theory. Exchange rate is

  • Given the following data, for each country compute the fundamental value of the exchange rate as predicted by purchasing power parity theory. Exchange rate is in terms of the local currency per US dollar. The price of Big Mac in US is $5.58. In your view, the actual exchange rate is overvalued or undervalued?

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