Practice Quiz 4 Answers

Consumption spending and within the rich countries

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Unformatted text preview: ng and within the rich countries, Japan had the highest inflation rates in the 1990s Big Mac Index: July 2010 US China Japan Norway Taiwan UK Price in domestic currency 3.73 dollars 13.2 yuan 320 yen 45 kroner 75 NT$ 2.29 pounds Price in US $s $3.73 $1.95 $3.67 $7.20 $2.34 $3.48 17. Above is the Big Mac Index published by the Economist magazine. Based on the prices of a Big Mac in these countries, the English pound is undervalued and thus US goods will look expensive in England and English goods look inexpensive in the US. a. True b. False This is true because when you buy the burger in the UK it costs $3.48, less than in the US, so in the UK imports from the US look more expensive and exports from the UK to the US look inexpensive in the US....
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