Monday, April 27, 2015

Chapter 11, Derik Graham, Question 6

I found the section in chapter 11 about overvalued and undervalued currencies very interesting. The example of the BMI or the Big Mac Index peaked my interest. I found it interesting that across countries goods and services that are sold worldwide can deviate in price other than the national exchange rates. I wonder if this is comparable to the example earlier of someone being able to swap currencies and buy TVs really cheap and sell them for a profit. Possibly an exploitation of the exchange rate by the government instead of an entreprenuer.

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