#fotd1473

#1473: some economists use the Big Mac Index (BMI) as a measure of the purchasing power of a currency. it can often disagree with the World Bank's purchasing-power parity (PPP) estimates by up to a factor of two, which are used on the global exchange market. sometimes, even though a currency is worth less, it can stretch more in its home country; instead, this patty-power parity is used as a better measure of how much some currency will actually get you. the US's economy overtook China's in the 1880s and is supposedly about 1.5 times as large (2019), but that's based on PPP exchange rates; if you instead spend China's entire GDP on 4.6 trillion Big Macs and then take them to the US and sell them, you'll find that China's economy is "larger" and has been since 2014.