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If I Only Had a Dollar

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If I Only Had a Dollar 2013-12-20T01:58:29+00:00


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The Exchange Rates
as of Dec 05, 2013 09:54 UTC

US Dollar
1.00 USD
British Pound
Indian Rupee
Australian Dollar
Canadian Dollar
Emirati Dirham
Swiss Franc
Chinese Yuan Renminbi
Malaysian Ringgit
New Zealand Dollar
South African Rand
South Korean Won

In America $1 can buy you…

McDonalds Premium Roast Coffee
14.5 Oz can of Vegetable Medley
125 Styrofoam Plates
20 sq. ft. of Giftwrap
A Box of Crayons
7 lb. Bag of Cat Litter
A Lottery Ticket
A Newspaper
A Box of Bandages
A Box of Tissues
Antibacterial Spray Cleaner
6 pack of 16.9 oz Bottled Water
2 Yellow Legal Pads

The Big Mac, an International Comparison

1986: The Economist published “The Big Mac Index” a lighthearted approach to analyzing the difference between actual prices and exchange rates.
Average price of a Big Mac in America in July 2013 was $4.56.

What “Implied” Exchange Rate Is: Take China for example. You have the actual price a Big Mac sells for in China… 16 Yuan… or $2.61. But the actual exchange rate of dollar to Yuan is 6.13 to 1. This means that if China sold Big Macs solely on the basis of the actual exchange rate, it would cost more than 16 Yuan. They don’t. They are undervaluing it by 42.8 percent. So… by that measure…the implied exchange rate is 3.51 yuan to 1.

Big Mac Price: $2.61 (Yuan 16.00)
Actual Exchange Rate: 6.13 Yuan : $1 (What the exchange rate actually is.)
Implied Exchange Rate: 3.51 Yuan : $1 (What you’d think the exchange rate would be based on the price)
Undervalued by: 42.8%

Big Mac Price: $1.50 (Rupee 90.00)
Actual Exchange Rate: 59.98 Rupees : $1
Implied Exchange Rate: 19.75 Rupees : $1
Undervalued By: 67.1%

Big Mac Price: $2.86 (Peso 37.00)
Actual Exchange Rate: 12.94 Pesos : $1
Implied Exchange Rate: 8.12 Pesos : $1
Undervalued By: 37.3%

Big Mac Price: $6.16 (SKr 41.61)
Actual Exchange Rate: 6.76 SKr : $1
Implied Exchange Rate: 9.13 SKr : $1
Overvalued By: 35.1%

Big Mac Price: $7.51
Actual Exchange Rate: 6.13 Kroners : $1
Implied Exchange Rate: 10.10 Kroners : $1
Overvalued By: 64.7%

*Exchange rates calculated July 2013.

In Zimbabwe, a hamburger that costs $1 in U.S. would cost up to $15 in U.S. dollars (the country adopted the U.S. dollars in 2011)

What is PPP?
PPP stands for Purchasing Power Parity.

Example: If a soccer ball costs $10 in the U.S., it should cost $7.40 in France when the exchange rate is .74 to $1. Effectively, both cost $10.
The relative version of PPP is calculated as:

”S” represents exchange rate of currency 1 to currency 2 
”P1″ represents the cost of good “x” in currency 1
”P2″ represents the cost of good “x” in currency 2

Around the World, $1 U.S. will buy you…
Kenya:  $1 buys eight cups of milk
Bangladesh: $1 buys 1 dozen eggs
United Kingdom: $1 buys a copy of The Sun newspaper
Vietnam: $1 buys 3 pairs of flip flop sandals
Colombia: $1 buys a cup of coffee and 2 cookies
Denmark: $1 buys a liter of Milk
Turkey: $1 buys 3 bottles of Water
Russia: $1 buys 1kg of Apples
Peru: $1 buys 3 ice cream cones
Croatia: $1 buys 3kg of Potatoes
Belgium: $1 buys 3 cans of baked beans
Korea: $1 buys three songs at a Karaoke club
Austria: $1 buys a freshly baked Kornspitz
India: $1 buys a full meal of boiled rice, dal, vegetables, pickles, and chutney

Commodities (what you could get for $1)
Crude Oil: 0.4316 gal
Heating Oil: 0.326 gal
Gold: 0.000814 troy ounces
Silver: 0.0516 troy ounces
Corn: 0.232 bushels or 7.424 lbs