The Big Mac Index dated May 01, 2009 shows that the price of Big Mac in China converted from the local currency, yuan, to be $ 1.83; whereas its price in the United States was $ 3.54. This shows that:
A) Big Mac is more popular in China than in the United States.
B) Big Mac is less expensive in the United States than in China.
C) Chinese yuan is overvalued when compared to US $.
D) Chinese yuan is undervalued against the US $.
E) beef is less expensive in China than in the United States.
Answer: D) Chinese yuan is undervalued against the US $.