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Suppose on Jan 1, 2018 a Big Mac costs $5.50 in the US Suppose on Jan 1, 2018, the actual INR/USD spot rate is 53.

Suppose on Jan 1, 2018 a Big Mac costs $5.50 in the US


Suppose on Jan 1, 2018, the actual INR/USD spot rate is 53. Noting again that a Big Mac in India is INR 286, we can conclude that the Indian Rupee is:

Undervalued

Overvalued

Correctly Valued

In Equilibrium

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