Max Hobrough, chapter 11, Question 7

In chapter 11 they talk about international markets and how they operate and how they can relate each other. I think the most interesting section of this chapter is how they actually use the Big Mac Index all over the world to compare prices in the economy. This is an easy product to do a comparison because all over the world it has to be made with the same ingredients. This meathod can determine how strong an economy's currency is compared to other countries. Now though this is not as effective because different economy's have been crashing and the fast food lifestyle has gone down the drain. Another part of this chapter that seemed interesting was that Pepsi made a barter agreement with Russia for vodka because their currency was so soft and weak that it would be worthless for Pepsi to use. This system can be very effective because it can cut out all of the negative externalities for the most part, when it comes to the rate of exchange in currency. If more people started to do this they could get what they wanted without all of the unnecessary eceonomics effects.