Please answer fast i give you upvote. [Related to Solved Problem 8.3] The Economist magazine tracks the prices of the McDonald's Big Machamburger in countries around the world. The following table shows the price of Big Macs in the United Statesand in five other countries, along with the exchange rate between that country's currency and the U.S. dollar.CountryUnited StatesBrazilIsraelSouth KoreaSwitzerlandVenezuelaBig Mac pricein domesticcurrency$4.3310.08 reals11.9 shekels3,700 won6.5 Swiss francs34 BolivarsExchange rate (unitsof foreign currencyper U.S. dollar)2.044.081,1510.994.29Source: "The Economist Big Mac Index," Economist, July 26, 2012.With respect to the theory of purchasing power parity, the statistics in this table areO A. inconsistent since the domestic currency prices of Big Macs (for the non-U.S. countries), whenconverted into dollars, differ markedly from $4.33.O B.consistent since the domestic currency prices of Big Macs (for the non-U.S. countries), whenconverted into dollars, would not differ from $4.33 if transportation costs are included.O C. inconsistent, since purchasing power parity implies that $4.33, when converted into other currencies,should be sufficient to just purchase a Big Mac in the non-U.S. countries.O D. neither consistent or inconsistent, since purchasing power parity only applies to non-traded products.E. Both A and C are correct.If the purchasing power parity theory allowed us to exactly determine exchange rates in the short run, theexchange rate between the South Korean won and the Swiss franc would be won per franc. (Enter yourresponse rounded to three decimal places.)

PPP is the exchange rate at which one nation’s currency would be converted into another to purchase…

[Related to Solved Problem 8.3] The Economist magazine tracks the prices of the McDonald's Big Mac hamburger in countries around the world. The following table shows the price of Big Macs in the United St and in five other countries, along with the exchange rate between that country's currency and the U.S. dol Country United States Brazil Israel South Korea Switzerland Venezuela Big Mac price in domestic currency $4.33 10.08 reals 11.9 shekels 3,700 won 6.5 Swiss francs 34 Bolivars Exchange rate (units of foreign currency per U.S. dollar) 2.04 4.08 1,151 0.99 4.29 Source: "The Economist Big Mac Index," Economist, July 26, 2012. With respect to the theory of purchasing power parity, the statistics in this table are

[Related to Solved Problem 8.3] The Economist magazine tracks the prices of the McDonald's Big Mac hamburger in countries around the world. The following table shows the price of Big Macs in the United St and in five other countries, along with the exchange rate between that country's currency and the U.S. dol Country United States Brazil Israel South Korea Switzerland Venezuela Big Mac price in domestic currency $4.33 10.08 reals 11.9 shekels 3,700 won 6.5 Swiss francs 34 Bolivars Exchange rate (units of foreign currency per U.S. dollar) 2.04 4.08 1,151 0.99 4.29 Source: "The Economist Big Mac Index," Economist, July 26, 2012. With respect to the theory of purchasing power parity, the statistics in this table are

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Chapter1: Making Economics Decisions

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Question

Please answer fast i give you upvote.

[Related to Solved Problem 8.3] The Economist magazine tracks the prices of the McDonald's Big Mac
hamburger in countries around the world. The following table shows the price of Big Macs in the United States
and in five other countries, along with the exchange rate between that country's currency and the U.S. dollar.
Country
United States
Brazil
Israel
South Korea
Switzerland
Venezuela
Big Mac price
in domestic
currency
$4.33
10.08 reals
11.9 shekels
3,700 won
6.5 Swiss francs
34 Bolivars
Exchange rate (units
of foreign currency
per U.S. dollar)
2.04
4.08
1,151
0.99
4.29
Source: "The Economist Big Mac Index," Economist, July 26, 2012.
With respect to the theory of purchasing power parity, the statistics in this table are
O A. inconsistent since the domestic currency prices of Big Macs (for the non-U.S. countries), when
converted into dollars, differ markedly from $4.33.
O B.
consistent since the domestic currency prices of Big Macs (for the non-U.S. countries), when
converted into dollars, would not differ from $4.33 if transportation costs are included.
O C. inconsistent, since purchasing power parity implies that $4.33, when converted into other currencies,
should be sufficient to just purchase a Big Mac in the non-U.S. countries.
O D. neither consistent or inconsistent, since purchasing power parity only applies to non-traded products.
E. Both A and C are correct.
If the purchasing power parity theory allowed us to exactly determine exchange rates in the short run, the
exchange rate between the South Korean won and the Swiss franc would be won per franc. (Enter your
response rounded to three decimal places.)

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