In order to better compare/contrast costs of living in the various environments GNP/GDP may be adjusted to:
Country's inflation rate
Foreign exchange rate
Five-year national bond appreciation/depreciation
PPP (purchasing power parity)

Purchasing Power Parity (PPP) aims to measure relative cost of living between countries of different currencies. It is a calculation that takes into consideration the same set of products and services and the amount of currency required to purchase them in each country. According to the PPP, two currencies are in equilibrium when a set of goods and services has the same value in two countries, considering the exchange rate between them. For example, if a big mac that costs $ 2 in the US also costs the same value in another country, that means there is a balance exchange rate between the two countries' economies. However, if price distortions are found, it will be possible to identify the difference in the cost of living between two countries.Therefore, while GDP and GNP aim to measure the wealth produced by a country, PPP aims to measure the relative cost of living between countries.

In order to better compare/contrast costs of living in the various environments GNP/GDP may be adjusted to: Country's inflation rate Foreign exchange rate Five-year national bond appreciation/depreciation PPP (purchasing power parity)

Respuesta :

Otras preguntas

In order to better compare/contrast costs of living in the various environments GNP/GDP may be adjusted to:
Country's inflation rate
Foreign exchange rate
Five-year national bond appreciation/depreciation
PPP (purchasing power parity)