Using data from the St. Louis Federal Reserve
(FRED) (http://research.stlouisfed.org/fred2/),
analyze foreign exchange rates.
a. Find the most recent values from FRED
for the Japan/U.S. Foreign Exchange Rate
(DEXJPUS), China/U.S. Foreign Exchange
Rate (DEXCHUS), and the Mexico/U.S.
Foreign Exchange Rate (DEXMXUS).
b. Explain whether the exchange rates are quoted
as U.S. dollars per unit of foreign currency or
Units of foreign currency per U.S. dollar.
c. Suppose a Big Mac sells for 300 yen in Japan,
14 yuan in China, and 34 pesos in Mexico.
What is the price of a Big Mac in each country
in terms of U.S. dollars?
d. Assuming no transportation costs, explain in
which county you would want to purchase
a Big Mac and in which country you would
want to sell the same Big Mac in order to
make the highest profit possible.