Author Question: If the dollar/pound exchange rate is 2/, a Big Mac costs 5 in New York City and costs 2 in London, ... (Read 99 times)

stock · **on:** Jun 30, 2018

If the dollar/pound exchange rate is 2/, a Big Mac costs 5 in New York City and costs 2 in London, the pound is ________, and U.S. tourists will be ________.

A) overvalued; better off in London
B) overvalued; better off in New York
C) undervalued; better off in London
D) undervalued; better off in New York

Question 2

Having MFN status means that the country is getting the most favorable trade terms possible with a trading partner.

Indicate whether the statement is true or false