Looking forward to traveling again? Did you know you could use McDonald's Big Mac to find low-cost places to travel?
What Is The Big Mac Index?
Goods should cost the same in all countries... but they don't
The Big Mac Index shows if currencies are under or overvalued
Exchange rates can change over time
The index gives a rough idea of prices in other countries
It's a silly measure to compare and learn about basic economic principles
The Big Mac index does NOT provide information on:
A simple measure of a nation's economy
Wages paid by McDonald's
Low cost places to travel
A way to value currency
How Is The Big Mac Index Calculated?
What is a benefit of having an undervalued currency to your country?
Economic growth may happen
Local people are paid less
Short term inflation occurs
Goods are cheaper for foreign customers
How Does The Index Change Over Time?
In 2019 which country had the second most expensive Big Mac in USD?
Are There Alternative Indexes?
There are variations using Starbucks coffee. Using non-perishable goods is usually more accurate like Ikea’s Billy Bookcases or Apple's iPads seen in the video below:
The next time you go for a burger, share what you've learned about the Big Mac index with a friend!
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This Byte has been authored by
Director of Content Programs | Debate Coach