A case study in the chapter analyzed purchasing-power parity for several countries using the price of Big Macs. Here are data for a few more countries:
Country Price of a Big Mac Predicted Exchange Rate Actual Exchange Rate
Indonesia 35,750 rupiah rupiah/$US 13,359 rupiah/$US
Hungary 864 forint forint/$US 252 forint/$US
Czech Republic 79 koruna koruna/$US 20.75 koruna/$US
Thailand 119 baht baht/$US 31.95 baht/$US
China 20.4 yuan yuan/$US 6.43 yuan/$US
A. According to purchasing-power parity, what is the predicted exchange rate between the Hungarian forint and the Chinese yuan? What is the actual exchange rate?