The Big Mac Index demonstrates the concept of Purchasing Power Parity
If the current price of a Big Mac hamburger in the United States is $3.80, and the current price of the same burger in Germany is €2.75, what is the implied exchange rate of dollars per euro?
A) $0.7237/€
B) $1.3818/€
C) $1.4421/€
D) $1.5133/€
Answer: B
Explanation: B) The implied exchange rate is the price in dollars / the price in euros. = $3.80/€2.75 = $1.3818/€
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