Purchasing Power Parity establishes an exchange rate that maintains purchasing power from one country to another. The Big Mac Index is a measure put out to calculate Purchasing Power Parity. For this discussion, your task is to:
Read the following article about the Big Mac Index:
https://www.economist.com/big-mac-index. It links to an external site.
- Explain why the Big Mac is a good product to find PPP.
- Explain why the exchange rate is not always in PPP.