The big mac price index computed by the economist has, Econometrics

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The big mac price index computed by the economist has

(Case Study: The Big Mac Price Index) The Big Mac Price Index computed by The Economist has consistently found the U.S. dollar to be undervalued against some currencies and overvalued against others, which seems to call for a rejection of the purchasing power parity theory. Explain why this index may not be a valid test of the theory.

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