Question

Sometimes, analysts use the price of specific products in different locations to compare currency valuation and purchasing power. For example, the Big Mac Index compares the purchasing-power parity (PPP) of many countries based on the price of the Mic Mac. Locate the latest edition of this index that is accessible. Identify the five countries (and their currencies) with the lowest purchasing-power parity according to this classification. Which currencies, if any, are overvalued?

Answer 1

Hi

The answer of the following question is given below as follows :

Big Mac price in $ (P) 4.93

So now the five countries and currencies with lowest purchasing power parity is given below as follows in the table form :

Country Big Mac price (P). PPP (P/$)

Venezuela. 0.66 0.133875

Ukraine. 1.55 0.312383

India. 1.9 0.38539

South Africa. 1.77 0.359026

Russia 1.54 0.310346

So after having a deep analysis on the above data we can clearly say that the currencies of Switzerland, Sweden and Norway are overvalued according to the index.

I hope I have served the purpose well.

Thanks.