EC290 Lecture Notes - Lecture 6: Exchange Rate, Ukrainian Hryvnia, United States Dollar
Document Summary
The big mac model of the real exchange rate. The big mac model of real exchange rates can used between any pair of countries in the data set. Consider the data reproduced below for norway, switzerland, the ukraine and russia as well as for china. The chinese currency seems to go by two names in the world, the yuan and the remimbi. Comparisons are with the united states where a big. Mac cost . 06 us dollars in 2016 (average over 6 cities). You can check your answers at this website http://www. economist. com/content/big-mac-index. The big mac is the bundle in this real exchange rate world. Calculate the implied purchasing power parity exchange rates that sets the price of the big mac equal for. Implied purchasing power parity exchange rate : domestic currency units per. B given the actual exchange rate, calculate the number of local big macs that trade for one us big mac.
