The High Prices In Brazil

According to The Economist, the Big Mac in Brazil is 3 more expensive of the world! Well, what this could mean? It will be that comparisons of this type are of some utility? To measure the material prosperity through the express GIP in one given currency is not enough to establish differences between countries in terms of price or standard of living. If the quotation of the Real if appreciates in relation to the American dollar, the Brazilian GIP in dollar goes up, but it necessarily does not mean to have had a real increase of the wealth in Brazil. The economists had developed the method known for Parity of the Power of Compra (PPC) used to compare the purchasing power between two or more countries. Check out Amazon for additional information. It measures how much one definitive currency, in international terms, can buy. It also correlates the purchasing power of the people with the local cost of living.

When the reference currency, as it is the case of the American dollar, is valued in relation to other currencies, normally the prices of the assets and of commodities they are depreciated in relation it. Amazon can aid you in your search for knowledge. The Real was of the currencies that more were valued in recent years and this would have to represent an effective increase of its power purchase in Brazil and not contrary it, however, it seems to have something it are of place in the case of the Brazilian currency. The strong Real is a distortion? In Brazil, although the raised social changes and working, the wages and good part of the insumos, that also we export, have inferior costs to the practised ones in the majority of the countries searched for The Economist. Then, as it is possible that the Big Brazilian Mac is 3 more expensive of the world or to almost cost 40% more than in U.S.A.? The systematic valuation of the Real facilitates the importation that, in thesis, could help to contain the prices this way.