Discover answers to your questions with Westonci.ca, the leading Q&A platform that connects you with knowledgeable experts. Connect with professionals on our platform to receive accurate answers to your questions quickly and efficiently. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.

A case study in the chapter analyzed purchasing-power parity for several countries using the price of Big Macs. Here are data for a few more countries:
For each country, select the predicted exchange rate of the local currency per U.S. dollar. (Hint: Recall that the U.S. price of a Big Mac was $4.37.)

chile
hungary
czech republic
brazil
canada

According to purchasing-power parity, the predicted exchange rate between the Hungarian forint and the Canadian dollar is forints per Canadian dollar. However, the actual exchange rate is forints per Canadian dollar.


Sagot :

Answer:

Predicted exchange rate = Country price of Big Mac/ US price of Big Mac

Predicted exchange rate:

Chile = 2,050 / 4.37

= 469.11 Pesos / US dollar

Hungary = 830 / 4.37

= 189.93 Forints / USD

Czech Republic = 70 / 4.37

= 16.01 Korunas / USD

Brazil = 11.25 / 4.37

= 2.57 Real/ USD

Canada = 5.41 / 4.37

= 1.24C$/ US$

According to purchasing power parity, the predicted exchange rate between the Hungarian forint and the Canadian dollar is 153.42 Forint per C$. However, the actual exchange rate is 217 Forint per Canadian Dollar.

Predicted exchange rate = 830 / 5.41 = 153.42 Forint per C$

Actual Exchange rate = 217/1 = 217 Forint per C$

View image Parrain
Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thank you for your visit. We're dedicated to helping you find the information you need, whenever you need it. Thank you for visiting Westonci.ca, your go-to source for reliable answers. Come back soon for more expert insights.