How much does a big mac cost in venezuela

1- According to a Wall street Journal article, the last quarter of 2018 led the Italian economy into a recession. Italy has suffered enormous debt and weak industrial production, even their growth forecasts were slashed by the European Commission from 1.2% to 0.2% in 2019. This percentage is the lowest annual growth in five years. All of these negative effects on the economy was due to the political changes in 2018.

Even after all these issues , Italy has been one of the biggest beneficiaries of this years global market resurgence. Investors are diving back into Italy's markets even as the recession looms over their economy. This has been good for banks, especially those banks that struggles with bad loans.

The central bank also revealed a 34% year-over-year decline in bad loans in December. This was better than analysts forecasted or expected.

For details about this article please refer to the link below.

https://www.wsj.com/articles/investors-dive-back-into-italy-even-as-recession-bites-11550581202

2-It is projected by the Wall Street Journal Staff, there will inflation on retail sales and industrial output. Considerably low energy prices within the past few months has caused a slight inflation for the economy. Prices remained constant. Lowered energy prices resulted in Americans' saving additional money. In addition to those low prices wages began to rise. Although energy prices were low there was a negative outcome for retail sales. Sales have declined over the past couple of months. There has been an increase in demand for exports of goods. Due to the recent government shutdown sentiment has reached its lowest point of two years. Although the past couple years have not been prosperous it is projected the sentiment will regain momentum within the upcoming months.

https://www.wsj.com/articles/u-s-economy-week-ahead-inflation-delayed-retail-sales-and-more-11549828800?mod=searchresults&page=1&pos=3

3- A black market refers to an underground operation which is normally against the rules set by an institution. The activities carried in a black market are normally illegal, especially in foreign exchange transactions. Additionally, the black market for currency arises due to high inflation rates. In Venezuela, the black market is an issue of concern because it allows people to convert their currency into dollars in order to purchase cheaper goods from the U.S.

The black market has impacted Venezuela negatively and based on a report by AFP on January 28th, 2019, Venezuela’s Bolivar is currently valued at 248,567.75 Bolivars per one dollar which is a decrease from its previous value. The reduction of value is meant to match the value of the currency in the black market in order to create balance. However, this reduction might scare a lot of people who do not want to risk losing the value of their money.

https://www.marketwatch.com/story/venezuela-devalues-currency-to-align-with-black-market-afp-2019-01-28

4- An article written on efinancemanagement.com is a close representation of topics discussed in Chapter 10. The article focused on economic exposure. Economic exposures tend to long term and can have a large impact a particular company’s market value. It is often hard for companies to deal with economic exposure head on due to the uncertainty within foreign exchange rates. Whenever the foreign exchange volatility increases the economic exposure will increase.

The article made a key point that companies based overseas are more likely to experience economic exposure. Firms are able to determine economic exposure by seeing if their product prices and input costs are sensitive to changes in currency. Also firms that do not make modifications to their products & inputs due to changes in currency are more likely to be impacted. Overall it is best for companies to assess to see whether they are a strong candidate to be affected by economic exposure. If they are they should follow the proper steps to minimize the negative effects it can have on the company.

https://efinancemanagement.com/international-financial-management/economic-exposure

5- The article “Validity of International Fisher Effect in the West African Monetary Zone” published in the Journal of Economic Cooperation & Development at www.questia.com (Links to an external site.)Links to an external site. is closely tied to the materials in chapter 8 about the international Fisher Effect. The article exemplifies the role of the central bank at the epicenter of the interaction between exchange rates movements and a country’s inflation rates (Adam & Ofori, 2017). This is because, the central bank, for example, the Federal Reserve of the United States observes these interactions to formulate monetary policies and to effectively manage foreign exchange (Adam & Ofori, 2017). On the other hand, materials in chapter 8 describe these interactions in relation to the International Fisher effect. Specifically, chapter 8 posits that the International Fisher Effect suggests that the imbalance in interest rates between countries estimates the expected exchange rates between their currencies.

Article sourced at: https://www.questia.com/library/journal/1P4-2018610175/validity-of-international-fisher-effect-in-the-west (Links to an external site.)

6- So what do Big Macs have to do with purchasing power parity? They provide a real-life, easy to digest (for some) example of differences between country’s exchange rates and their actual currency value.

The below article from The Economist revisits The BIg Mac Index theory they first proposed in 1986. The Big Mac Index, or burgernomics, is based on the PPP theory, which suggests that exchange rates should move towards a rate that would allow the prices of identical baskets of goods or services to become equal in different countries. It is important to note this theory implies a notion of time: that over the long run, exchange rates will move towards rates that allow for equal prices of goods. It does not indicate that at any given time, identical baskets of goods and services will have the same price in different countries.

Nonetheless, burgernomics allows for an easy understanding of how actual exchange rates vary from the Big Mac exchange rate. For example, in January 2019, a Big Mac cost $5.48 in the U.S. and £3.19 in Britain. The implied exchange rate here is .57, but the actual exchange rate between the U.S. dollar and the British pound last month was .78. The Big Mac Index, which is based on the PPP tells us that currently, the British pound is undervalued by 27%. Over time, according to PPP the actual exchange rate should move in a direction to allow the cost of Big Macs in Britain and the UK to equalize.

https://www.economist.com/news/2019/01/10/the-big-mac-index

7- The yield on the benchmark 10-year U.S. Treasury note rose to 2.702% Wednesday—on par with Tuesday’s close. Still, the tepid close-to-close move obscures the crosscurrents facing money managers who are trying to gauge the pace of U.S. economic growth relative to the rest of the world.

Bond prices rallied early in the day following weak data out of Europe showing German manufacturing orders slumped unexpectedly in December—another sign to investors of the economic strain countries beyond the U.S. are experiencing.

Yields climbed as the U.S. Treasury auctioned $27 billion in 10-year Treasury notes to what traders said was a fair amount of demand. Treasurys are expected to hit further pricing pressures.

That is because data coming out of Europe and Asia continue to portray a deterioration in economic conditions, pushing investors into the relative protection afforded by a stronger-positioned U.S. economy.

https://www.wsj.com/articles/u-s-government-bond-prices-rise-after-data-show-narrowing-trade-deficit-11549471283

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3- A black market refers to an underground operation which is normally against the rules set by an institution. The activities carried in a black market are normally illegal, especially in foreign exchange transactions. Additionally, the black market for currency arises due to high inflation rates. In Venezuela, the black market is an issue of concern because it allows people to convert their currency into dollars in order to purchase cheaper goods from the U.S.

The black market has impacted Venezuela negatively and based on a report by AFP on January 28th, 2019, Venezuela’s Bolivar is currently valued at 248,567.75 Bolivars per one dollar which is a decrease from its previous value. The reduction of value is meant to match the value of the currency in the black market in order to create balance. However, this reduction might scare a lot of people who do not want to risk losing the value of their money.

https://www.marketwatch.com/story/venezuela-devalues-currency-to-align-with-black-market-afp-2019-01-28

in this case, one of student respond a great respond and I want like this respond:

In my opinion, the major reason behind inflation is Venezuela central bank which made a huge mistake since 2014. Central bank overvalued bolivars to USD and, as a result, people started to involve in the black market to get better rate (i.e. in 2016, 900 bolivars= one USD in the black market). Such thing created a significant shortage in food and medicine along with the attendance of the economic collapse. In addition, central bank offers different exchange rate based on the purpose which also exacerbated this issue. For example, a business man who intend to import clothes, he will get a special exchange rate from central bank. Unfortunately, people can take the advantage and exchange the amount in the black market.

In fact, the government tried to solve this issue by using several systems since 2014, including but not limited to SIMAD, SICAD, DIPRO, and DICOM but people in Venezuela still get better exchange rate from black market. I think this is a complicated subject and Venezuela central bank will spend a lot of time to solve such issue for many reasons that I mentioned before in my argument along with the attendance of corruption that incurred in Venezuela at these days.

your task:

I would like to respond in all articles like a student