The exchange rate to the PPP implied exchange rate

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Assume the price level in USA is USD 15,300, the price level in Philippines is PHP 841,500, and the spot exchange rate is USDPHP 52.10.

A. What is the internal purchasing power of 10,000 USD? (4 decimal places)

B. What is the internal purchasing power of 10,000 PHP? (4 decimal places)

C. If Absolute PPP holds, what should the exchange rate be? (4 decimal places)

D. According to Absolute PPP, is the PHP overvalued or undervalued?

E. How much de/appreciation of the PHP would be required to move the exchange rate to the PPP implied exchange rate?

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