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This is an index used to compare the price of a good across countries.
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The law of one price states that the price of a good sold internationally should converge as entrepreneurs try to profit from any price discrepancy.
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The purpose of the Big Mac index, which compares the price of the Big Mac burger across countries, is to establish the purchasing power parity between currencies.
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It has been published by the British magazine The Economist since 1986.
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One drawback of the Big Mac index is that goods that look physically similar to each other may not necessarily be similar in their economic nature.
Source:TH