Suppose That on Monday,a Big Mac Cost $3

Multiple Choice

Suppose that on Monday,a Big Mac cost $3.00 in the United States and 320 Japanese yen in Japan.On Monday,the exchange rate was $1 = 90 yen.According to the purchasing power parity theory,the yen was __________ by approximately __________ percent.

A) overvalued; 22
B) undervalued; 40
C) overvalued; 29
D) undervalued; 19
E) overvalued; 19