A Big Mac costs $4.56 in the United States and 9.2 zlotys in Poland. If the exchange rate is 3 zlotys per dollar, purchasing power parity predicts that

a) the zloty is overvalued
b) the dollar is undervalued
c) the dollar is overvalued
d) both the zloty and dollar are undervalued


Answer: c) the dollar is overvalued

Economics

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