If inflation is lower in China than the US how would this im

If inflation is lower in China than the US how would this impact the Big Mac Index?

The price of a Chinese Big Mac would increase relative to the US price.

The price of a Chinese Big Mac would decrease relative to the US price.

The Big Mac Index is not affected by inflation.

The price of an American Big Mac would decrease relative to the Chinese price.

Both a and d are correct.

Solution

The price of a Chinese Big Mac would decrease relative to the US price.