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 $4.93.) Country Price of a Big Mac Predicted Exchange Rate Actual Exchange Rate Colombia 7,900 pesos 1,602 pesos/$ 3,254 pesos/$ Sri Lanka 350 rupees 71 rupees/$ ▼ 144 rupees/$ Russia 114 rubles 23.1 rubles/$ ▼ 74.7 rubles/$ Saudi Arabia 12 riyals 2.43 riyals/$ ▼ 3.75 riyals/$ France 4.1 € 0.83 C/$ ▼ 0.93 €/$ According to purchasing-power parity, the predicted exchange rate between the Sri Lankan rupee and the euro is_ 71 V rupees per euro. However, the actual exchange rate is rupees per euro.
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 $4.93.) Country Price of a Big Mac Predicted Exchange Rate Actual Exchange Rate Colombia 7,900 pesos 1,602 pesos/$ 3,254 pesos/$ Sri Lanka 350 rupees 71 rupees/$ ▼ 144 rupees/$ Russia 114 rubles 23.1 rubles/$ ▼ 74.7 rubles/$ Saudi Arabia 12 riyals 2.43 riyals/$ ▼ 3.75 riyals/$ France 4.1 € 0.83 C/$ ▼ 0.93 €/$ According to purchasing-power parity, the predicted exchange rate between the Sri Lankan rupee and the euro is_ 71 V rupees per euro. However, the actual exchange rate is rupees per euro.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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How would I find the actual exchange rate to answer the bottom part of the data shown.
Transcribed Image Text: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 $4.93.)
Country
Price of a Big Mac
Predicted Exchange Rate
Actual Exchange Rate
Colombia
7,900 pesos
1,602 pesos/$
3,254 pesos/$
Sri Lanka
350 rupees
71 rupees/$
144 rupees/$
Russia
114 rubles
23.1 rubles/$
74.7 rubles/$
Saudi Arabia
12 riyals
2.43 riyals/$
3.75 riyals/$
France
4.1 €
0.83 €/$
0.93 €/$
According to purchasing-power parity, the predicted exchange rate between the Sri Lankan rupee and the euro is
71
v rupees per euro.
However, the actual exchange rate is
rupees per euro.
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