International economics

Group activity: Josko Joras (A), December 2012

For an open economy

GDP = C + I + G + (X – M).

However it’s important to realise that imports don’t subtract from GDP.

Read more about the Big Mac index at The Economist. For more on how Argentina games it, see:

There are several nice utilisations of the Big Mac Index. For example, in a study that looked at the best cities in the world to study in, they used the Big Mac Index as a measure of living costs.  (And if you’re curious, the best city in the world to study in is…. London!)

Here’s an intro to Balance of Payments:

Instructor Resource: 

  • Josko Joras (A) Solutions, December 2012
  • Josko Joras (B), December 2012
  • Josko Joras (B) Solutions, December 2012

This page ties into Chapter 10 of Economics: A Complete Guide for Business

Learning Objectives: Perform foreign exchange calculations. Understand Balance of Payments
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