MKT 100 Lecture Notes - Lecture 85: Big Mac Index, Gross National Income, Market Basket

• School: Ryerson University
• Department: Marketing
• Course: MKT 100
• Professor: Anthony Bonato

Document Summary

Gross domestic product (gdp), the most widely used of these measures, is defi ned as the market value of the goods and services produced by a country in a year. Gross national income (gni) consists of gdp plus the net income earned from investments abroad (minus any payments made to nonresidents who contribute to the domestic economy). In other words, u. s. fi rms that invest or maintain operations abroad count their income from those operations in the gni but not the gdp. 12. Another frequently used measure of an overall economy is the purchasing power parity (ppp), a theory that states that if the exchange rates of two countries. A novel measure that employs ppp to assess the relative economic buying power among nations is the economist"s big mac. Index, which suggests that exchange rates should adjust to equalize the cost of a basket of goods and services, wherever it is bought around the world.