Purchasing Power Parity
Definition
The exchange rate that equalizes the cost of a common basket of goods between two countries. Used to compare real living standards.
Example
Nominal Chinese GDP is much smaller than US; PPP-adjusted, it's larger.
The exchange rate that equalizes the cost of a common basket of goods between two countries. Used to compare real living standards.
Nominal Chinese GDP is much smaller than US; PPP-adjusted, it's larger.