Big Mac Index is contstructed upon the theory of purchasing-power parity (PPP) where it is postulated that a dollar should buy roughly the same amount in all countries. Theoretically the exchange rate over time between two countries should move towards parity that will equalize the prices identical basket of goods and services in each country indexed. The "basket" that the Economist chose is the McDonald's Big Mac. This product is produced in 120 countries world wide. According to the Economist, Big Mac PPP is the exchange rate that would translate into hamburgers costing the same in America as abroad. Comparing the actual exchange rate with the PPP indicates whether a currency is overvalued or undervalued ("Big mac index," 2011) Based upon the 2010 figures, the country where the Big Mac is the most expensive is in Norway where it cost $7.88 ("2010 big mac index," 2010). It is least expensive to buy a Big Mac in Croatia where it costs $1.50...
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