The Big Mac Index demonstrates the concept of Purchasing Power Parity. If the price of a Big Mac burger in the United States is $4.25 and the current €/$ exchange rate is €0.7506/$1, what is the implied price of a Big Mac in France?
A) $3.19
B) €3.19
C) €5.66
D) €4.25
Answer: B
Explanation: B) Price in euros = Price in dollars × the €/$ exchange rate = $4.25 × €0.7506/$1 = €3.19.
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