What is Purchasing power parity

Question

and why is it important when compairing two countries’ Gross Domestic Product?

In: 1

Answer 1

Purchasing Power Parity (PPP) is a metric used to show how much you could buy when comparing the strength of currencies. It is imperative to use this to compare Gross Domestic Product to show differences in how many goods are available to purchase as well as how much of these goods can people purchase.