Suppose the price a Burger in India is Rs. 210 and in USA it is $3. The Exchange rate between two country is $1 = Rs. 73.4. Is there any chance of arbitrage in this situation and does the purchasing power parity prevail at this situation?

Suppose the price a Burger in India is Rs. 210 and in USA it is $3. The Exchange rate between two country is $1 = Rs. 73.4. Is there any chance of arbitrage in this situation and does the purchasing power parity prevail at this situation?

Economics:

10th Edition

ISBN:9781285859460

Author:BOYES, William

Publisher:BOYES, William

Chapter36: Exchange Rates And Financial Links Between Countries

Section: Chapter Questions

Problem 11E

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