*formerly posted on the BGSU MBA blog in 2009
Good morning everyone! Hope you are having a good week. Hope you also enjoyed the orientation day if you were able to attend last Friday. I know that my classmates and I are busy, busy, busy this week and this month. Just talking to Lenee up in the GEPB Office, I realized that I have individual or team papers due in April in every class. In light of this, blogging is a good way to take some time to relax and reflect.
As I have seen and you will see in your full-time MBA experiences, there will be people from different countries, different cultures, and different economies gathered together. This means that different people will be familiar with different monetary units. For example, I recall that students discussed different currencies as was appropriate for their Ethics, Law, and Communication class presentation/paper topics. Personally, I do not know exchange rates off the top of my head, especially since they change as frequently as daily. Yet, it helps to see how each country's economy is interrelated, ultimately forming the world economy.
More than 20 years ago, the "Big Mac index" was established as a way to compare currencies against the United States dollar. Basically, the prices of Big Macs in several countries are collected and converted to U.S. dollars using the exchange rate. Then, the price of the Big Macs in these countries are compared to the U.S. price to determine "purchasing-power parity". Afterwards, the purchasing-power parity is compared to the actual exchange rate to determine the valuation of the dollar as evenly valued, undervalued, or overvalued.
Exchange rates can be confusing. Using actual physical goods as opposed to just using theories can help people to better understand how exchange rates work. Hopefully, the "Big Mac index" has helped you. Otherwise, a link for currency conversion is listed below.
Yahoo! currency conversion
Big Mac index
Good morning everyone! Hope you are having a good week. Hope you also enjoyed the orientation day if you were able to attend last Friday. I know that my classmates and I are busy, busy, busy this week and this month. Just talking to Lenee up in the GEPB Office, I realized that I have individual or team papers due in April in every class. In light of this, blogging is a good way to take some time to relax and reflect.
As I have seen and you will see in your full-time MBA experiences, there will be people from different countries, different cultures, and different economies gathered together. This means that different people will be familiar with different monetary units. For example, I recall that students discussed different currencies as was appropriate for their Ethics, Law, and Communication class presentation/paper topics. Personally, I do not know exchange rates off the top of my head, especially since they change as frequently as daily. Yet, it helps to see how each country's economy is interrelated, ultimately forming the world economy.
More than 20 years ago, the "Big Mac index" was established as a way to compare currencies against the United States dollar. Basically, the prices of Big Macs in several countries are collected and converted to U.S. dollars using the exchange rate. Then, the price of the Big Macs in these countries are compared to the U.S. price to determine "purchasing-power parity". Afterwards, the purchasing-power parity is compared to the actual exchange rate to determine the valuation of the dollar as evenly valued, undervalued, or overvalued.
Exchange rates can be confusing. Using actual physical goods as opposed to just using theories can help people to better understand how exchange rates work. Hopefully, the "Big Mac index" has helped you. Otherwise, a link for currency conversion is listed below.
Yahoo! currency conversion
Big Mac index