A Big Mac in Mexico City sells for 51 pesos, while it sells for $5.50...
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Accounting
A Big Mac in Mexico City sells for 51 pesos, while it sells for $5.50 in New York City. The spot exchange rate is 19 pesos per dollar. If you believe in absolute purchasing power parity, is the peso undervalued or overvalued relative to the dollar? Calculate the percentage of undervaluation or overvaluation.
Group of answer choices
53.9% undervalued
104.9% overvalued
52.5% overvalued
51.2% undervalued
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