The Economist's Big Mac Index is a financial instrument almost thirty years old, built on the theory of the Purchasing Power Parity. PPP essentially means that, over time, currency exchange rates should equalize such that identical goods cost roughly the same in any two countries. It is used to measure the value of currencies in that if more of a currency is required in one country than another to get the same thing, the local currency is undervalued by a certain percentage. The Big Mac Index uses a McDonald's Big Mac as its measuring stick. It currently allows for the […]
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