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Watch: What Big Macs Can Teach Us About World Economies

Why McDonald's food is a useful tool to compare global currencies

Like them or not, Big Macs are iconic: McDonald's signature burger was launched way back in 1967, and most people probably know the jingle by heart. But the special sauce-slathered burger also has a greater significance: In 1986, the Economist unveiled the Big Mac Index as a way of determining whether or not global currencies are being valued at the correct levels based on the theory of purchasing power parity, and it's still widely used today. If you slept through your college economics course, fret not: This video explains it all.

McDonald's isn't the only chain restaurant that's used to gauge conditions of the world around it: FEMA uses an informal metric called the Waffle House index to determine the impact of hurricanes. Since the restaurants are located across the nation's hurricane zone and are usually open 24 hours a day, whether they shut down — and how quickly or not they reopen — is a major indicator of a storm's severity.

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