The Big Mac index is a measure of how well the purchasing power parity theory works.

Name: The Big Mac index is a measure of how well the purchasing power parity theory works.
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Question

Quizplus · Accepted Answer

The Big Mac index compares the price of a Big Mac in different countries to assess whether currency exchange rates are in line with the theory of purchasing power parity. Therefore, it is indeed a measure of how well the theory works.

The Big Mac Index Is a Measure of How Well