Discussion Big Mac Index - Purchasing Power Parity establishes
Discussion Big Mac Index
Big Mac Index
Purchasing Power Parity establishes an exchange rate that maintains purchasing power from one country to another. The Big Mac Index is a measure put out to calculate Purchasing Power Parity. For this discussion, your task is to:
Read the following article about the Big Mac Index:
https://www.economist.com/big-mac-index. It links to an external site.
1. Explain why the Big Mac is a good product to find PPP.
2. Explain why the exchange rate is not always in PPP.