What is meant by purchasing power parity?
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What is meant by purchasing power parity? |
Answer and Explanation
Explanation
Purchasing power parity, or the law of one price, is a relationship that says that the same products should cost the same in every country after converting the local currency to foreign currency. For example, if a set of golf balls costs $10 in the US and 1 US dollar equals 70 Indian rupees, the set should cost 700 rupees in India.
Verified Answer
The same products should cost the same in every country after currency conversion.
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