Examlex
Reserves include each of the following except
Purchasing Power Parity
An economic theory that compares different countries' currencies through a "basket of goods" approach, aiming to determine the adjustments needed to make the exchange rates of two currencies equal.
Basket of Goods
Is a selected set of products and services whose prices are tracked to measure inflation or cost of living changes in an economy over time.
Equilibrium Exchange Rate
The exchange rate at which the demand for a currency exactly matches its supply, resulting in stable market conditions without the need for official intervention.
Purchasing Power Parity
An economic theory that estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.
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