Determine the value of NAFTA member countries' currency compared with the U.S. dollar today and in the near future, i.e. 30, 60, and 90. Then, using the current U.S. price of a Big Mac at a local McDonald's, apply the "Big Mac Index" to estimate the price of a Big Mac in the NAFTA countries based on the exchange rate. Through the Internet, compare the actual price of a Big Mac then explain why there may be a discrepancy between the Big Mac Index based on the exchange rate and the actual price of a Big Mac. How does the caparison inform business about the true value of a transaction?
Use the information to advise a company on their pricing strategy. Decide whether the strategy will be the same in comparative cities in Canada, USA and Mexico. Explain how and why you come up with that decision.
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