Suppose that a Starbuck’s venti latte currently sells for US$4.00 in the United States and C$5.00 in Canada. Make up a value for the exchange rate between the U.S. dollar and the Canadian dollar (expressed as Canadian dollars per U.S. dollar) that leaves the U.S. dollar overvalued on a Starbuck’s purchasing power parity basis. Then use your numbers to show that, at this exchange rate, it would be cheaper to purchase coffee in Canada than in the U.S.