_____ show how many units of currency are needed in one country to buy the amount of goods and services that the same unit of currency will buy in another country.
A) Price indexes
B) Exchange rates
C) Purchasing power parities
D) Value added exchanges

Question

Quizplus · Accepted Answer

Purchasing power parities (PPP) show the relative value of currencies based on the actual buying power of each currency. It is a measure that takes into account the different prices of goods and services in different countries, and determines how much a certain amount of currency would be able to buy in each country. It allows for a more accurate comparison of the standard of living between different countries. Price indexes, exchange rates, and value-added exchanges do not take into account the different prices of goods and services in different countries.

_____ Show How Many Units of Currency Are Needed in One