According to purchasing power parity, if the price of a Big Mac is lower in India and China than in Europe, then the currencies of India and China are undervalued.

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According to the theory of purchasing power parity (PPP), exchange rates between two currencies should adjust to reflect the price levels in each country. If the price of a Big Mac (which is a standardized good) is lower in India and China than in Europe, it suggests that the currencies of India and China are undervalued relative to the Euro. This is because, in order for PPP to hold, the exchange rates between currencies must adjust to equalize the prices of goods like the Big Mac across countries.

According to Purchasing Power Parity, If the Price of a Big