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The implied PPP rate of exchange of Mexican pesos per US dollar is 858 according to the Big Mac Index The current exchange rate is Peso 1081 Thus according to PPP and the Law of One Price

The implied PPP rate of exchange of Mexican pesos per U.S. dollar is 8.58 according to the Big Mac Index. The 
current exchange rate is Peso 10.8/$1. Thus, according to PPP and the Law of One Price, at the current exchange 
rate the peso is ________.
A) overvalued
B) undervalued
C) correctly valued
D) not enough information to answer this question

Apr 18 2021 View more View Less

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