Analyze why the index may not be a valid test of the theory, Macroeconomics

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Analyze why the index may not be a valid test of the theory

Problem

(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.

The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.

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