The number of units of developing country currency required to purchase a basket of goods and services in a developing country that costs one dollar in the U.S.is given by
A)GNP price deflator.
B)Human Development Index ranking.
C)purchasing power parity.
D)the exchange rate.

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) is a measure of the relative value of a currency against another currency. It compares the prices of a basket of goods and services between countries, taking into account the exchange rate, to determine how many units of one currency are needed to purchase the same basket of goods and services as one dollar in the U.S. Therefore, it is the best choice for the given scenario.

The Number of Units of Developing Country Currency Required to Purchase