The Big Mac Index Illustrates That in Lower-Income Nations

question 80

Multiple Choice

The Big Mac index illustrates that in lower-income nations:

• A) Big Mac prices, converted to a common currency, were cheaper.
• B) PPP cannot be computed in this manner because diets in lower-income nations do not include fast food.
• C) Big Mac prices, converted to a common currency, were more expensive.
• D) lower-income workers could not afford to purchase fast food.

---

Definitions:

Direct Method

A cash flow statement approach that lists major payments and receipts within operating activities directly.

Noncash Accounts

Accounts that represent transactions not involving physical cash, such as depreciation, amortization, or accruals.

Direct Method

A cash flow statement preparation approach that lists major operating cash receipts and payments, providing a clearer view of cash flow sources and uses.

Total Assets Ratio

A financial ratio comparing the total assets of a company to another financial metric, often used to assess a company's leverage or investment efficiency.