What is purchasing power parity?

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And what do people mean when they say one currency is “stronger” than another?

In: Economics

3 Answers

Anonymous 0 Comments

Purchasing power parity tries to better match income vs. costs. Income in one country may be 1/4 what it is in another country, but if rent, food, etc. also cost 1/4 then the purchasing parity is about even.

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