What is Big Mac Index?

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Accepted Answer

The Big Mac Index is an informal, yet widely cited, economic indicator published by The Economist since 1986 that measures the purchasing power parity (PPP) between two currencies by comparing the price of a McDonald's Big Mac burger in different countries, thereby providing a lighthearted but effective gauge of whether currencies are overvalued or undervalued against the US dollar.

Big Mac Index

What is Big Mac Index?

What is the Big Mac Index and how is it calculated to determine Purchasing Power Parity (PPP)?

How is the Big Mac Index utilized by Foreign Exchange (FX) traders and analysts?

What are the primary limitations and criticisms of using the Big Mac Index as an economic indicator?

When have specific historical Big Mac Index readings provided accurate long-term forecasts for currency movements?

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