The idea that the value of money is equal across countries is known as
A) interest rate parity.
B) the expected profit parity effect.
C) purchasing power parity.
D) exchange rate parity.

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) is the economic theory that suggests that the level of prices in different countries should be equivalent when expressed in a common currency, implying that the value of money is equal across countries. This concept is used to compare the economic productivity and standards of living between countries over time.

The Idea That the Value of Money Is Equal Across