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Chart Vizzard
Vizzlo's AI-based chart generatorThe Big Mac index
The Big Mac index was invented by The Economist in 1986 an informal way of measuring the purchasing power parity (PPP) between two currencies and provides a test if they are at their “correct” level. It “seeks to make exchange-rate theory a bit more digestible.”
For example, using figues in July 2021: the price of a Big Mac was $5.65 in the US and €4.27 in the Euro area. The implied purchasing power parity is $1.32 to €1, that is $5.65 / €4.27 = 1.32.
This compares with an actual exchange rate of $1.18 to €1 at the time, thus the euro was undervalued against the dollar by 11%.
This is an example of Vizzlo's “Dot Plot Chart”
The dot plot chart is a visually appealing alternative to the bar chart for single or multiple categories of data.