You notice that the price of a big mac in Argentina is 40 pesos. Here in the USA the price is $4.00. a. what is the purchasing power parity exchange rate between Argentina and the USA? b. if the actual exchange rate is 15 pesos to the $ is the Argentine currency undervalued or overvalued. c. assume that inflation in Argentina during the next year is expected to be 15% and that inflation in the US is expected to be around zero. What would you expect to happen to the $/peso exchange rate?

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