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Posted: June 15th, 2022
EXCHANGE RATES AND FREE TRADE
Exchange Rates, the Big Mac Price Index, and the Debate over Free TradeActions for Exchange Rates, the Big Mac Price Index, and the Debate over Free Trade1. What Price for a Big Mac?Review a recent Economist report on the Hamburger Index, at http://www.economist.com/content/big-mac-indexChoose a foreign country that you have visited – or would like to visit. Download the data (there is a link at the bottom of the page). USING THE DATA (use “dollar price of a BigMac”in column D) explain whether a Big Mac costs more or less than in the United States. Is their currency over- or under-valued? Explain what that means, in your own words.Next, check the business section of the newspaper and explain whether the currency that you chose has appreciated or depreciated since the Economist article was written in January 2015.2. Free Trade – Pro or Con?After reading the Heritage Foundation’s guide for policy-makers, give one example from your own life of of a way in which you have benefitted from free trade. Is there any way in which you have been hurt by free trade, but that this article does not address?
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