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I calculated Big Mac Index for USD/RUB and obtained that RUB is undervalued approximately 40%. It is explained by the fact that in Russia we have low labor costs.

I also calculated exchange rate on the example with apple price. I choosed apple price in USA and in Russia and obtain the same result - RUB is undervalued approximately 40%.

My question is: if the salaries in Russia will be raised then we will have that current exchange rate 1USD=88RUB corresponds PPP. But if we calculate again exchange rate on the example with apple price we obtain that RUB is undervalued 40% again.

How is it possible? Where did I go wrong?

Thanks!

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