Lubenis and Govedia are two countries in Eastern Europe. A similar type of corn is sold in both these countries. The price of corn in Lubenis is cheaper than the price of corn in Govedia. This means that the consumers in Lubenis can get more corn for the same amount of money than consumers in Govedia can. Given the scenario, it can be said that Lubenis's _____ is higher than that of Govedia.

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) refers to the relative value of currencies in terms of how much of a specific good or service they can buy. In this scenario, since consumers in Lubenis can buy more corn for the same amount of money than those in Govedia, it indicates that Lubenis has a higher purchasing power parity regarding corn.

Lubenis and Govedia Are Two Countries in Eastern Europe