10 Whacky Economic Indicators (That May Be True)

10 Whacky Economic Indicators (That May Be True)

Big Mac Index

Published by The Economist, this indicator measures purchasing power parity (PPP) between economies and is a guide as to whether currencies are at their “correct” level. PPP says where exchanges rates should move in the long run . It looks at the price of a Big Mac burger, which is available in 100 different countries. In the July 2011 index, a Big Mac in the U.S. cost $4.07, whereas in China it cost $2.27. This suggests the Chinese Yuan is 44 percent undervalued versus the U.S. dollar; otherwise the price of the Big Mac would be the same. (Do you want fries with that?)

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