If the current USDJPY exchange rate is 135.00 Japanese yen per U.S. dollar, the price of a Big Mac hamburger in the United States is $3.41, and the price of a Big Mac hamburger in Japan is 380 yen, then other things equal, the Big Mac hamburger in Japan is ______________ (over-valued; under-valued; fairly-valued).
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If the current USDJPY exchange rate is 135.00 Japanese yen per U.S. dollar, the price of a Big Mac hamburger in the United States is $3.41, and the price of a Big Mac hamburger in Japan is 380 yen, then other things equal, the Big Mac hamburger in Japan is ______________ (over-valued; under-valued; fairly-valued).
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- Let a Big Mac hamburger in the U.K sell for £1.99. Also, let the same hamburger sell for $2.71 in the U.S. Finally, the actual exchange rate (to buy $1.00 with British pounds) is 0.63. According to ------, the British pound is ------ vs the US dollar. a . interest-rate parity - overvalued b . purchasingpower parity - overvalued c . purchasing-power parity - undervalued d . interest-rate parity - undervaluedIf a Big Mac costs 550 yen in Japan and the exchange rate of Japanese yen against US dollar is 100 yen/$, and a Big Mac costs $5 in the U.S., does PPP hold? (show your calculations instead of only answering Yes or No)If a Japanese car costs 1,500,000 yen, a similar American car costs $30,000, and a dollar can buy 100 yen, what are the nominal and real exchange rates?
- One Big Mag Burger: In KSA = 10 Riyal In USA = 4.3 $ Exchange rate: 1$ = 3.75R • Tell if the value of Riyal is over or under valued in terms of US dollar.A product sells for $1,000 in the U.S. If the exchange rate between $ and euro is $1 = 0.90 euro, and if ppp holds, what would be the price of the same product in europe?A bundle of goods in Japan costs ¥2,642,000 while the same goods and services cost $32,500 in the United States. a. If purchasing power parity holds, what is the current exchange rate of U.S. dollars for yen? b. If, over the next year, inflation is 8 percent in Japan and 10 percent in the United States, what will the goods cost next year? c. Will the dollar depreciate or appreciate relative to the yen over this time period?
- In 1983, the Japanese yen–U.S. dollar exchange rate (USD/JPY) was 245 yen per dollar,and the dollar cost of a compact Japanese-manufactured car was $8,000. Suppose that now the exchange rate is 80 yen per dollar. Assume there has been no inflation in the yen cost of an automobile so that all price changes are due to exchange rate changes. What would the dollar price of the car be now, assuming the car’s price changes only with exchange rates?Suppose a U.S. firm purchases some Chinese handicrafts. The china costs 1,000 Chinese yuan. At the exchange rate of $1.00 = 6.2 yuan, the dollar price of the goods is:A telephone costs $50 in the United States. Today, in the currency markets you observe the following exchange rates:1 U.S. dollar = 135.21 Japanese Yen1 Japanese Yen = 0.41 Philippine pesosAssume that the currency markets are efficient and that purchasing power parity holds worldwide. What should be the price of the same telephone in Philippines (in terms of Philippine pesos. Format: 1,111.11
- The theory of purchasing power parity (PPP) states that in the long-run exchange rates between two countries adjusts so that the price of an identical good is the same when expressed in the same currency. A scanner costs £65.45 in England. The spot rate is currently $1.8967 per pound. ST 30378 8330378 Glelbicke Mars ONF LAR Assuming that PPP holds true, what is the price of the scanner in the United States? O $105.52 O $130.35 O $124.14 O $136.55 Suppose the price of the scanner in the United States was actually $136.55. Assuming no transaction costs, transportation costs, or import restrictions, what does PPP predict would happen to the demand for the scanner in the United States? O The demand for the scanner would increase in the United States. O The demand for the scanner would decrease in the United States.The theory of purchasing power parity (PPP) states that in the long-run exchange rates between two countries adjusts so that the price of an identical good is the same when expressed in the same currency. A scanner sells for $65.45 in the United States. The exchange rate between the U.S. dollar and the Swiss franc (SFr) is $0.8245 per Swiss franc. Assuming that PPP holds true, how much does the same scanner cost in Switzerland? SFr 95.26 SFr 83.35 SFr 99.23 SFr 79.38Given S(USD/AUD) = 0.7899, the price of a consumption basket in the US is$100 and the price of the same basket in Australia is $120. What is the real exchangerate and is it higher or lower than the nominal exchange rate?