The Economist Publishes Annually the "Big Mac Index" by Which

question 23

Multiple Choice

The Economist publishes annually the "Big Mac Index" by which they compare the prices of the McDonald's Corporation's Big Mac hamburger around the world. The index estimates the exchange rates for currencies based on the assumption that the burgers in question are the same across the world and therefore, the price should be the same. If a Big Mac costs $2.54 in the United States and 294 yen in Japan, what is the estimated exchange rate of yen per dollar as hypothesized by the Hamburger index?

• A) $0.0086/¥
• B) ¥124/$
• C) $0.0081/¥
• D) ¥115.75/$

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Definitions:

Natural Resources

Naturally occurring materials or substances that can be exploited for economic gain, such as minerals, forests, water, and fertile land.

Future Generations

The people who will live in the future, for whom current generations may hold ethical responsibilities.

Disruptive Innovation

An innovation that significantly alters the way that businesses operate, often displacing established market leaders and creating new industry standards.

Gaming Console

An electronic device designed specifically for playing video games that connects to a display device like a television.