1. Use the information in the table below to answer the following questions.
A. Calculate whether the won, the shekel, and the zloty are overvalued
or undervalued with respect to the US dollar in terms of purchases of
Big Macs. Explain what it means to be over or undervalued.
B. What would the exchange rates have to be in order equalize big Mac
prices between South Korea and the US, Israel and the US, and Poland
and the US?
C. If in the long run the exchange rate moves to satisfy Big Mac PPP,
will the won, shekel and zloty, respectively, appreciate or depreciate
in terms of dollars? Explain the logic.