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    Purchasing power parity (PPP) is an exchange rate between two countries that equalizes the purchasing power of their currencies in each country. The PPP exchange rate is the rate at which the currencies of two countries would have to be converted so that a basket of goods would cost the same in both countries. PPP helps account for differences in cost of living between countries that a market exchange rate may not reflect.

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    Purchasing power parity (PPP) is an exchange rate between two countries that equalizes the purchasing power of their currencies in each country. The PPP exchange rate is the rate at which the currencies of two countries would have to be converted so that a basket of goods would cost the same in both countries. PPP helps account for differences in cost of living between countries that a market exchange rate may not reflect.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
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    0 views3 pages

    FD 123

    Uploaded by

    Pranay Wani
    Purchasing power parity (PPP) is an exchange rate between two countries that equalizes the purchasing power of their currencies in each country. The PPP exchange rate is the rate at which the currencies of two countries would have to be converted so that a basket of goods would cost the same in both countries. PPP helps account for differences in cost of living between countries that a market exchange rate may not reflect.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Purchasing Power Parity

    Introduction

    • PPP – Exchange rate between two countries at which the


    their currencies have the same purchasing power
    • At PPP exchange rate, a basket of goods will cost the same in
    both the countries

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