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Big Mac Index is a great educational tool to make people understand Purchasing Power Parity theory in relation to two currencies. Due to huge worldwide sale and reach of McDonald's products, it has to have some limited economic merit. The real PPP of currencies explains the exchange rate movements between currencies based on the cost of sample basket of goods and services in two countries.

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Q: Is the Big Mac Index a good indicator?
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The Big Mac Index is a survey that is done by the magazine, 'The Economist.' It is a lighthearted guide that is published by the magazine as a way to measure the purchasing power parity between different nations. It is also called Big Mac PPP.


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