How Many International Big Macs Can You Get For a Buck?

The Economist recently released their fun Big Mac Index. Forget what Federal Reserve Chairman Ben Bernanke or Wall Street says, the value of the US Dollar is best determined by how many McDonald’s (NYSE: MCD) all-beef patties you can get around the world for a buck …

THE Big Mac index is based on the theory of purchasing-power parity (PPP)-exchange rates should equalise the price of a basket of goods in different countries. The exchange rate that leaves a Big Mac costing the same in dollars everywhere is our fair-value benchmark. So our light-hearted index shows which countries the foreign-exchange market has blessed with a cheap currency, and which has it burdened with a dear one.

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