The Purchasing Power Parity (PPP)consists of a Method of Comparing

question 98

Multiple Choice

The purchasing power parity (PPP) consists of a method of comparing the:

• A)labor force in different countries.
• B)daily calories supplied in different countries.
• C)income in different countries by looking at the domestic purchasing power of money.
• D)life expectancy rates in different countries.

---

Definitions:

Compound Interest

A method where interest is calculated not just on the initial amount invested or borrowed, but also on the interest that has been accumulated over previous periods, for either savings or loans.

Discount Rate

The rate of interest that is applied to find out the present value of cash flows predicted in the future, within the framework of discounted cash flow analysis.

Present Value

The monetary valuation presently of a future sum of money or ongoing cash flows, considering a predetermined rate of return.

Interest Rate

The amount charged by a lender to a borrower for the use of assets, expressed as a percentage of the principal, typically on an annual basis.