The Big Mac Index Is Used to Illustrate Purchasing Power

question 26

Multiple Choice

The Big Mac index is used to illustrate purchasing power parity (PPP) . Which one of the following is NOT an argument as to why this single product is appropriate for making PPP claims?

• A) The product is standardized across countries.
• B) The product is composed of several other goods.
• C) The product's price is affected by local real estate and labor costs.
• D) The product's price is always set in U.S. dollars.

Identify the importance of honesty, integrity, and virtue in business ethics.

Understand the impact of misleading communications, including fraud, on stakeholders.

Differentiate ethical issues from legal issues in business practices.

Comprehend the role of ethical decision-making in the business context, including the beginning of the ethical decision-making process.

---

Definitions:

Cash Increase

An upward movement in a company's cash balance, indicating improved liquidity or additional inflow of money.

Operational Cycle

The period between the acquisition of inventory by a company and the collection of payments for the goods or services sold.

Accounts Payable Period

The time between receipt of inventory and payment for it.

Cash Cycle

The period between the outflow of cash for the purchase of raw materials and the inflow of cash from the sale of goods or services, reflecting the time it takes for a business to convert its investment in inventory back into cash.