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  3. a big mac costs $4.50 in the u. s. and 3.60 euros

A Big Mac costs $4.50 in the U. S. and 3.60 euros in Germany. What...

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Finance

A Big Mac costs $4.50 in the U. S. and 3.60 euros in Germany. What is the Big Mac PPP based exchange rate expressed as dollars per euro? Round the answer to two decimal places and report it without any currency symbols.

The inflation rate in Germany is 4% per annum and the inflation rate in the US is 6% per annum. Over the year the spot exchange rate went from $1.30 per euro to $1.35 per euro. Is this information consistent with relative PPP?

Yes

No

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