Macroeconomics 1st Edition by Dean Karlan,Jonathan Morduch

تمرين 33

In Windsor, Ontario, a Big Mac from McDonald's costs C$4.16 (Canadian dollars), and across the border in Detroit it costs $3.54 in U.S. dollars.
a. Suppose the nominal U.S. exchange rate with Canada is US$0.80 per Canadian dollar. Does purchasing power parity hold between the two countries?
b. What is the purchasing power parity exchange rate for the U.S.?