AP MacroeconomicsInternational & Development Economics
Purchasing Power Parity (PPP)
Purchasing power parity is the idea that exchange rates should adjust so a basket of goods costs the same across countries.
PPP is used to compare living standards and real GDP across nations more fairly than market exchange rates, which can be distorted. The 'Big Mac Index' is a popular informal PPP measure.
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Exchange Rates →
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Exchange Rates →
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