Infographic: Everything You Need To Know About The Big Mac Index From 2011
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The Big Mac Index is one of the most popular, but informal, ways of measuring global purchasing power parity. By comparing the cost of a Big Mac sold at a McDonald’s in two separate countries, one can supposedly measure whether a nation’s currency is currently under-or-over valued.
The Big Mac Index is one of the most popular, but informal, ways of measuring global purchasing power parity. By comparing the cost of a Big Mac sold at a McDonald’s in two separate countries, one can supposedly measure whether a nation’s currency is currently under-or-over valued.
Though the index is often lauded for its simplicity in understanding, there are also limitations such as the failure to account for distortions caused by transport costs, taxes, labour laws, levels of competition, and trade barriers. Still, the way the Big Mac Index works is noteworthy as a straight forward method of comparison, and has widely become accepted as a comparison tool.
Check out this infographic, which explores the mechanics of the Big Mac Index, as well as the implications from the index in 2011.
Via: Online MBA Blog
