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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

Quiz

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?

Quiz

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?

Quiz

In 2019 which country had the second most expensive Big Mac in USD?

Venezuela

United States

Germany

Portugal

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:

Summary

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

KD

Kassie Dwarika

Director of Content Programs | Debate Coach