Create threads to answer the discussion question. The Big Mac index is published by The Economist as an informal way of measuring the purchasing power parity (PPP) between two currencies and provides a test of the extent to which exchange rates result in goods costing the same in different countries.
The Big Mac PPP exchange rate between two countries is obtained by dividing the price of a Big Mac in one country (in its currency) by the price of a Big Mac in another country (in it’s currency). This value is then compared with the actual exchange rate; if it is lower, then the first currency is under- valued (according to PPP theory) compared with the second, and conversely, if it is higher, then the first currency is over-valued.
Visit The Economists Burgernomics page- on the left side choose different countries to see how the Big Mac stacks up.
1. Discuss 3 new things you learned from The Big Mac index. In the discussion, provide insight learned from Burgernomics. (Minimum 150 words.
Use terms and concepts from Chapter 8.
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