If a Big Mac Costs $3

Multiple Choice

If a Big Mac costs $3.41 in the United States and $2.67 in Argentina (the price of a Big Mac in Argentine pesos converted into dollars at the spot exchange rate) , which of the following is most likely true?

A) The peso is overvalued against the dollar.
B) The dollar is overvalued against the peso.
C) It should be harder for a U.S. tourist to buy a leather coat in Buenos Aires because the dollar won't go very far.
D) It will be cheap for Argentine companies to invest in the United States because the dollar is relatively weak.