Starbucks opened its first store in Zagreb, Croatia, in October 2010. In Zagreb, the price of a tall
vanilla latte is 25.66
25.66 Croatian kunas (kn or HRK). In New York City, the price of a tall vanilla latte is $2.67
2.67. The exchange rate between Croatian kunas and U.S. dollars is kn 5.6288 equals $ 1
kn5.6288=$1. According to purchasing power parity, is the Croatian kuna overvalued or undervalued?
The percentage of overvaluation or undervaluation is
%. (Round to two decimal places.)
According to purchasing power parity, the exchange rate is based on equity of prices. The... View the full answer