Purchasing power parity refers to
A)adjustments in GDP figures to put everything into one common currency for comparison sake.
B)adjustments in exchange rate conversions that take into account differences in inflation rates across countries.
C)adjustments in exchange rate conversions that take into account the differences in true cost of living across countries.
D)calculating real,per capita GDPs in dollars.

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries. This means adjustments in exchange rate conversions consider the differences in true cost of living across countries, allowing for a more accurate comparison of economic indicators.

Purchasing Power Parity Refers to