The table below reports the price of a Big Mac in various countries, and the exchange rate relative to the U.S. dollar.

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The Table Below Reports The Price Of A Big Mac In Various Countries And The Exchange Rate Relative To The U S Dollar 1 (168.42 KiB) Viewed 11 times

The table below reports the price of a Big Mac in various countries, and the exchange rate relative to the U.S. dollar. Price in domestic Exchange rate (foreign currency per dollar) currency U.S. dollar Chinese yuan Indian rupee Japanese yen Mexican peso The Big Mac Index Part 2 (1 point) 5.58 20.90 178.00 390.00 49.00 Use the information in the table to answer the questions below. 1.00 6.85 69.685 108.44 19.31 Price in U.S. dollars Consider India. Holding the exchange rate and the price of a Big Mac fixed, if purchasing power parity (PPP) held perfectly, the price of a Big Mac in India should be rupees (round your answers to two decimal places). $5.58 3.05 2.55 3.60 2.54 Choose one or more: OA. A good in a foreign country may not be the same as the good in the United States. OB. Shipping costs may be too high. O C. Some goods and services cannot be traded. OD. There are trade barriers that limit the amount of trade. Q See Hint Consider India. Holding the prices of a Big Mac fixed in India and the United States, if PPP held perfectly, the exchange rate should be rupees per dollar (round your answers to two decimal places). From parts 1 and 2, we can see that PPP does not hold perfectly. Either the dollar is overvalued, or the price of a Big Mac in the foreign country is too low for the exchange rates given. Which of the following are most likely to be reasons why PPP does not hold perfectly in the case of Big Macs?