McDonald’s counts on the reliability of their customers just as customers count on the reliability of the chain restaurant. The world’s cheapest Big Mac can be purchased in Lebanon, according to The Economist’s “The Big Mac index.” The index aims to highlight the purchasing power of currencies in different countries through comparison of the cost of an identical product – McDonald’s Big Mac burger. Is the Big Mac Index a good measure of PPP? Which country sells the cheapest Big Macs? Is the Big Mac index a good measure of PPP?Īlthough it appears to be in jest, the Big Mac PPP is a fairly good starting point when measuring the purchasing power between currencies. Hence, the demand for a burger is relatively less. The index’s limitations are as follows: In many countries, dining at McDonald’s is relatively expensive when compared to dining at a local restaurant. Is Big Mac index accurate?ĭespite being a reasonable real-world measurement, some economists criticize this index.
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