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
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Answer:
Explanation:
our question eight is asking us to compute the predicted exchange rate off the local currencies for U. S. Dollars. So we have to growing these blanks. So we know that a big black is four point four point nine three dollars in the US So when we are cultivating the predicted exchange Aries, we just have to be wide the local price. Why four point nine three to get the predictive exchange rate? Okay, so I have to use my calculator now. So if I divided this twenty one hundred castles by four point nine three equals to love close to for four hundred twenty five, nineteen six. So we have together this amount of paths sessoms to in exchange for one U. S. Dollars. OK, so we do the same thing for the second one. So one nine hundred divided by four point nine three A's one hundred eighty two point. Why five six on? We can like, make a small comparison between the actual extreme tree. We can see that it's quite different. Okay. And then seventy five, divided by four point nine three is ah, fifteen wait two one and then thirteen point three divided by A four point nine three is to point seven four. Okay, the last one for Canadian dollars. Five point eight four divided by four point nine three ISS one point one eight So we can see that we're Canadian dollars. The predictive ex injury is somehow closes to the actual exchange rate. Basic questions be according to the purchasing power parity. What is the predicted exchange rate between the Hungarian Foreign and Canadian dollars? So now we can We have to look at a Gary done here. This one, this entry and the Canadian this entry. So they're predicted. Exchange rate should be one hundred eighty two point of five six divided by one point one eight, which is so I divided by this. By this, I get one hundred forty happened love fifty four point seven one.