The amount that a local currency equivalent of U.S.$1 will purchase in a given country is a measure of:

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) is a theory that measures the amount of adjustment needed on the exchange rate between countries so that the exchange will enable each country to purchase the same basket of goods and services. Thus, it reflects the amount that the local currency equivalent of U.S.$1 will purchase in a given country.

The Amount That a Local Currency Equivalent of U