The Purchasing Power Parity (PPP) Method

question 30

Multiple Choice

The purchasing power parity (PPP) method

• A) calculates the cost of purchasing a specific bundle of goods and services in each country and uses this measure to convert the incomes of different countries to a common currency.
• B) calculates how much the general price level has increased within one specific country through time.
• C) calculates how much the average standard of living across all countries has changed through time.
• D) is used when one wants to compare dollar values from today with those from more than 100 years ago.

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