It “seeks to make exchange-rate theory a bit more digestible”. 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 market exchange rates result in goods costing the same in different countries. McDonald’s prices around the world are an incredibly useful means to measuring purchasing power parity between countries but how much does a McDonald’s meal cost around the world for a South African.
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