Data from The Economist BigMac index from January 2022 shows that the local price of a Big Mac in Argentina is 450 Argentine pesos (ARS) and the price of a Big Mac in Britain is 3.59 pounds sterling (GBP). The exchange rate XARS/GBP = 140.895. Assume there is no bid-ask spread. Calculate the pound sterling price of a Big Mac in Buenos Aires (capital of Argentina) and the Argentine peso price of a Big Mac in London (capital of the UK)
Data from The Economist BigMac index from January 2022 shows that the local price of a Big Mac in Argentina is 450 Argentine pesos (ARS) and the price of a Big Mac in Britain is 3.59 pounds sterling (GBP). The exchange rate XARS/GBP = 140.895. Assume there is no bid-ask spread. Calculate the pound sterling price of a Big Mac in Buenos Aires (capital of Argentina) and the Argentine peso price of a Big Mac in London (capital of the UK)
Economics (MindTap Course List)
13th Edition
ISBN:9781337617383
Author:Roger A. Arnold
Publisher:Roger A. Arnold
Chapter34: International Finance
Section34.3: Fixed Exchange Rates
Problem 3ST
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Data from The Economist BigMac index from January 2022 shows that the local
Mac in Britain is 3.59 pounds sterling (GBP). The exchange rate XARS/GBP = 140.895.
Assume there is no bid-ask spread.
Calculate the pound sterling price of a Big Mac in Buenos Aires (capital of
Argentina) and the Argentine peso price of a Big Mac in London (capital of
the UK)
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