Saturday, July 26, 2014

The Big Mac Index

The 2014 Big Mac Index at The Economist is out and the average price of a Big Mac in the U.S. is $4.80. Norway has the most expensive Big Mac at $7.76 and the Ukraine has the cheapest Big Mac at $1.63. According to the Big Mac Index, five currencies are overvalued relative to the U.S. dollar by ay least 10 percent and 29 currencies are undervalued by at least 10 percent. Remember, the Big Mac Index is based off absolute purchasing power, which may not hold. For a video explanation of purchasing power parity, check out this video at Yahoo! Finance.