![Much Much](/uploads/1/1/7/7/117769747/764722906.png)
- I went through your drive-thru last night (Store #15038) and was very surprised when my bill came to $7.36 for just a Big Mac, medium fries, and 2 pies. I was charged 1.89 for the medium fries and your menu on this website for 2014 says price is 1.59.
- The one and only McDonald’s Big Mac® Combo Meal. Big Mac Ingredients include a classic sesame hamburger bun, Big Mac Sauce, American cheese and sliced pickles. The Big Mac Combo Meal is served with our World Famous Fries® and your choice of an icy Coca-Cola fountain drink.
Aug 24, 2016 According to the Big Mac Index, the US Dollar should be worth around Rs.26 or so or say Rs.30/- if we go by what is the considered view of the author Sree Iyer, on his article titled Why the Rupee exchange rate should be 30 to a dollar. As against this, the official exchange rate is around Rs.67/. Feb 06, 2020 The statistic depicts the prices for a Big Mac in Mexico from 2010 to 2020. The so-called Big Mac index is regarded as an indicator for the purchasing power of an economy.
How to deduce the peoples’ purchasing power through the price of a burger across vastly varied countries.
What is a fair price? This is the age-old question in economics. Water is essential to life, yet its price is nothing compared to diamonds, which are mere ornaments. Surely water is more valuable? Priyanka Chopra, who was feted for playing Mary Kom, earned more in a movie than the real Mary Kom over her lifetime. The acting role has “more value” than the real person’s feat. Beer in America is often cheaper than milk. Which is more nourishing? In the market economy, ultimately it is all about supply and demand. We could argue forever whether this is fair or not, but this is the brutal logic of the market. The value of all things is in terms of money. How do you determine the value of money? How do you know if a currency is fairly valued?
Let’s look at the rupee. How do we know it is fairly valued? By comparing it to other currencies. The exchange rate indicates its value. We know that these days you need Rs 64 to buy $1. In Thailand you need only 34 bahts for a dollar. But in Japan you need 125 yen for a dollar. Does than mean the rupee is half as strong as the Thai baht, and twice as strong as the yen? Of course not. You need to look at the average purchasing power in those countries. We know that those two currencies are “stronger” than the rupee. But exactly how?
For this, we use the Big Mac Index. This was proposed almost 30 years ago by The Economist magazine of London, and has been in vogue ever since. The Big Mac is the most popular hamburger sold at MacDonald’s fast food restaurants, which can be found in most countries across the world, and has tens of thousands of outlets. Let’s say you have $5 in your pocket. If you are in a typical neighbourhood of New York City, you would pay about $4.8 for a Big Mac. Now what if you roamed around the world with that $4.8? In Delhi you would have 4.8 x 64 = Rs 307.2. This can get you almost three Big Macs in Chankaypuri, because one costs only Rs 116. (Actually you will buy Maharaja Macs, since there is no beef-based hamburger at MacDonald’s in India). So the rupee exchange rate is too “cheap”. Or dollar is too “expensive”, ie, not fairly priced. You could do this exercise by roaming around in Tokyo, Bangkok, Moscow, Sao Paolo, Kiev, Karachi or even Timbuktu. The local price of the Big Mac tells you whether currency is undervalued (too cheap) or overvalued (too expensive) as compared to the official exchange rate.
Of course you can quibble. You can say the burger is cheap in India because labour is cheap. The Big Mac price will also be affected by the rentals to be paid (some cities like Mumbai have very high real estate prices). Despite its shortcoming the Big Mac index has been quite a reliable indicator of whether a currency is over or undervalued. In some ways this reliability of the index is connected to the theory of Purchasing
Power Parity, which says that eventually all items that can be traded across borders will achieve price parity. If steel was very cheap in India and expensive in Europe, it would get exported, until the excess supply in Europe drives down its price, and scarcity in India makes it more expensive.
The latest Big Mac index, published this month in The Economist, reveals that the Indian rupee is one of the most undervalued currencies in the world! It needs to be stronger by almost 60 per cent, ie, it should be at 40 not 64. Imagine how cheap will petrol become, but how unhappy Infosys and Wipro (software exporters) would be? Maybe we should have our own Masala Dosa Index!
What is a fair price? This is the age-old question in economics. Water is essential to life, yet its price is nothing compared to diamonds, which are mere ornaments. Surely water is more valuable? Priyanka Chopra, who was feted for playing Mary Kom, earned more in a movie than the real Mary Kom over her lifetime. The acting role has “more value” than the real person’s feat. Beer in America is often cheaper than milk. Which is more nourishing? In the market economy, ultimately it is all about supply and demand. We could argue forever whether this is fair or not, but this is the brutal logic of the market. The value of all things is in terms of money. How do you determine the value of money? How do you know if a currency is fairly valued?
Let’s look at the rupee. How do we know it is fairly valued? By comparing it to other currencies. The exchange rate indicates its value. We know that these days you need Rs 64 to buy $1. In Thailand you need only 34 bahts for a dollar. But in Japan you need 125 yen for a dollar. Does than mean the rupee is half as strong as the Thai baht, and twice as strong as the yen? Of course not. You need to look at the average purchasing power in those countries. We know that those two currencies are “stronger” than the rupee. But exactly how?
For this, we use the Big Mac Index. This was proposed almost 30 years ago by The Economist magazine of London, and has been in vogue ever since. The Big Mac is the most popular hamburger sold at MacDonald’s fast food restaurants, which can be found in most countries across the world, and has tens of thousands of outlets. Let’s say you have $5 in your pocket. If you are in a typical neighbourhood of New York City, you would pay about $4.8 for a Big Mac. Now what if you roamed around the world with that $4.8? In Delhi you would have 4.8 x 64 = Rs 307.2. This can get you almost three Big Macs in Chankaypuri, because one costs only Rs 116. (Actually you will buy Maharaja Macs, since there is no beef-based hamburger at MacDonald’s in India). So the rupee exchange rate is too “cheap”. Or dollar is too “expensive”, ie, not fairly priced. You could do this exercise by roaming around in Tokyo, Bangkok, Moscow, Sao Paolo, Kiev, Karachi or even Timbuktu. The local price of the Big Mac tells you whether currency is undervalued (too cheap) or overvalued (too expensive) as compared to the official exchange rate.
Of course you can quibble. You can say the burger is cheap in India because labour is cheap. The Big Mac price will also be affected by the rentals to be paid (some cities like Mumbai have very high real estate prices). Despite its shortcoming the Big Mac index has been quite a reliable indicator of whether a currency is over or undervalued. In some ways this reliability of the index is connected to the theory of Purchasing
Power Parity, which says that eventually all items that can be traded across borders will achieve price parity. If steel was very cheap in India and expensive in Europe, it would get exported, until the excess supply in Europe drives down its price, and scarcity in India makes it more expensive.
The latest Big Mac index, published this month in The Economist, reveals that the Indian rupee is one of the most undervalued currencies in the world! It needs to be stronger by almost 60 per cent, ie, it should be at 40 not 64. Imagine how cheap will petrol become, but how unhappy Infosys and Wipro (software exporters) would be? Maybe we should have our own Masala Dosa Index!
How Much Rupee For Big Mac Free
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Disclaimer: The views expressed here are the author's own. The opinions and facts expressed here do not reflect the views of Mirror and Mirror does not assume any responsibility or liability for the same.
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MORE POLLSWhat is Big Mac Index?
The Big Mac Index is published by the Economist to compare the currencies of different countries and to evaluate whether a particular currency is overvaluated or undervaluated.
It does so by looking at the price of a Big Mac burger, which is available in more than 100 countries with an identical recipe. Thus, a Big Mac in the U.S. costs $4.07 whereas in China it costs $2.27, using nominal exchange rates. From this, the index suggests that the Chinese yuan is 44% undervalued versus the U.S. dollar, otherwise the price of a Big Mac would be the same.
This is a simplistic way to demonstrate purchasing power parity, a theory that says that the exchange rate between two countries should move toward “correct” value, which would make the price of a basket of products the same in both countries. But despite being a crude measure, many economists and market pundits pay attention to the Big Mac index — including the Reserve Bank of India.
via Economist
According to this index, the Swiss Franc and the Norwegian Krone are both more than 60 percent overvalued compared to the US dollar. Much further down are Sweden with over 40% overvaluation and Brazil which shows more than 30%.
The flip side comes with the Indian Rupee, which had been hitting record lows last year. Here, we’re talking about a 60% undervaluation. Ukraine, Hong Kong and Malaysia come close at over 40% undervaluation. If you wondering China’s Yuan is the 5th most undervalued currency using this statistic, also more than 40% undervalued vis-a-vis the US dollar.
It should be noted that out of 10 undervaluater currencies 8 are Asian currencies.
Big MAC Index as per Economist
THE ECONOMIST’s Big Mac index is based on the theory of purchasing-power parity: in the long run, exchange rates should adjust to equal the price of a basket of goods and services in different countries. This particular basket holds a McDonald’s Big Mac, whose price around the world we compared with its American average of $4.20. According to burgernomics the Swiss franc is a meaty 62% overvalued. The exchange rate that would equalise the price of a Swiss Big Mac with an American one is SFr1.55 to the dollar; the actual exchange rate is only 0.96. The cheapest burger is found in India, costing just $1.62. Though because Big Macs are not sold in India, we take the price of a Maharaja Mac, which is made with chicken instead of beef. Nonetheless, our index suggests the rupee is 60% undercooked.
How Much Rupee For Big Machines
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