You may have already heard about economic indices, important tools for evaluating a country's economy. Among the available meters, there are some informal alternatives, such as the Big Mac index , which uses the value of a McDonald's hamburger to compare purchasing power in different economies. Do you have questions about the subject? In this article, understand how the Big Mac index works, what it is for and how it can be calculated. See also some curiosities and insights that can help you think about your investments. summary Understanding the Big Mac Index How does the index work? What is the Big Mac Index for? How to calculate the Big Mac Index.

How much is a Big Mac worth? Big Mac Index Trivia and Insights Understanding the Big Mac Index The Big Mac index is an economic indicator that uses McDonald's hamburger prices around the world to estimate the difference in purchasing power in Brother cell phone list different countries. It is based on the theory of Purchasing Power Parity (PPP) , a currency conversion metric that considers the amount of a currency needed to purchase products and services in the country of use. Thus, it helps to understand the power to purchase goods and services in a given location, providing a more effective comparison than when just converting the exchange rate. Who created the Big Mac Index? The index was created by the magazineThe Economistin 1986. 

Despite being considered an informal indicator, it allows a good comparison of purchasing power in different countries due to the global presence of Mc Donald's. Although it is not official and was not intended as an accurate indicator of monetary misalignment, the Big Mac index has become a global standard, has been included in economics textbooks and investigated by academic studies. How does the index work? The Big Mac index compares the prices of fast food chain McDonald's sandwiches in more than 50 countries. As the hamburger is produced and sold in the same way in all regions, its price could be the same in all locations, considering the conversion to dollars.