This preview shows page 1. Sign up to view the full content.
Unformatted text preview: ng and within the rich countries, Japan had the highest inflation rates in the 1990s
Big Mac Index: July 2010 US
UK Price in domestic
2.29 pounds Price in US $s
$3.48 17. Above is the Big Mac Index published by the Economist magazine. Based on the prices of a Big Mac in these
countries, the English pound is undervalued and thus US goods will look expensive in England and English goods look
inexpensive in the US.
This is true because when you buy the burger in the UK it costs $3.48, less than in the US, so in the UK imports from
the US look more expensive and exports from the UK to the US look inexpensive in the US....
View Full Document