Big Mac Index

The Big Mac Index is an index published by The Economist which tracks the retail price of just one identical product (the Big Mac from McDonald’s Corporation) which is produced and sold across numerous countries around the world.

The index is an important indicator of both consumer purchasing power and the purchasing power of different currencies because it is based on a compound product made up of many basic commodities (wheat, beef, vegetable oil, horticultural produce). The presence of McDonald’s outlets in around 60% of countries in entirely different geographic and political regions allows for a broad comparison of the costs of living around the world.

The index indicates the extent to which a Big Mac is undervalued or overvalued in different countries in relation to the values of major currencies. The index has consistently rated Switzerland as being one of the most expensive countries represented.

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