Purchasing-power parity, why is high levels of inflation bad?
Q. Hello! I am writing an essay about how inflation affects the exchange rate of a country. After reading up on the theory of Purchasing-power parity, I am confused as to why high levels of inflation is bad. According to the theory the exchange rate will adjust itself accordingly. However, high levels of inflation is known to decrease the wealth of the citizens in the long run according to my understanding.. Please help me get some clarity on the topic. Thanks!
Asked by Daniel - Tue May 6 18:22:50 2008 - - 1 Answers - 0 Comments
A. For the same reason it makes the citizens poor, inflation makes the economy poorer in trade. Your currency becomes a costly to hold, investments riskier, imports more expensive (as $1 no longer commands the power of the previous $1) and exports now need to be higher (for producers not to make a loss) than usual cost which is unattractive. There PPP is less for everyone who now holds the dollar than before. Business and consumer confidence in the currency suffers at home and abroad.
Answered by Loopie - Thu May 8 18:05:46 2008
Q. Hello! I am writing an essay about how inflation affects the exchange rate of a country. After reading up on the theory of Purchasing-power parity, I am confused as to why high levels of inflation is bad. According to the theory the exchange rate will adjust itself accordingly. However, high levels of inflation is known to decrease the wealth of the citizens in the long run according to my understanding.. Please help me get some clarity on the topic. Thanks!
Asked by Daniel - Tue May 6 18:22:50 2008 - - 1 Answers - 0 Comments
A. For the same reason it makes the citizens poor, inflation makes the economy poorer in trade. Your currency becomes a costly to hold, investments riskier, imports more expensive (as $1 no longer commands the power of the previous $1) and exports now need to be higher (for producers not to make a loss) than usual cost which is unattractive. There PPP is less for everyone who now holds the dollar than before. Business and consumer confidence in the currency suffers at home and abroad.
Answered by Loopie - Thu May 8 18:05:46 2008
What is a Indian Rupee worth in dollar terms based on the Purchasing Power Parity Terms?
Q. What is the worth of dollar when compared to Indian Rupee. The usual practice would be currency exchange rate. However I am looking for the purchasing worth of a dollar in United States and Indian Rupee in United States. This can be also for Euro in Europe and Indian Rupee in Europe. What is 1000 Rupee worth in Europe and United States.
Asked by Rajiv - Sun Dec 13 08:52:47 2009 - - 1 Answers - 0 Comments
A. Here's the link where you can go and see the rates daily:
Answered by Mr. X - Thu Dec 17 08:48:04 2009
Q. What is the worth of dollar when compared to Indian Rupee. The usual practice would be currency exchange rate. However I am looking for the purchasing worth of a dollar in United States and Indian Rupee in United States. This can be also for Euro in Europe and Indian Rupee in Europe. What is 1000 Rupee worth in Europe and United States.
Asked by Rajiv - Sun Dec 13 08:52:47 2009 - - 1 Answers - 0 Comments
A. Here's the link where you can go and see the rates daily:
Answered by Mr. X - Thu Dec 17 08:48:04 2009
If purchasing-power parity holds, a dollar will buy?
Q. a.one unit of each foreign currency. b.foreign currency equal to the U.S. price level divided by the foreign country s price level. c.enough foreign currency to buy as many goods as it does in the United States. d.None of the above is implied by purchasing-power parity.
Asked by seth - Wed Dec 16 00:30:16 2009 - - 1 Answers - 0 Comments
Q. a.one unit of each foreign currency. b.foreign currency equal to the U.S. price level divided by the foreign country s price level. c.enough foreign currency to buy as many goods as it does in the United States. d.None of the above is implied by purchasing-power parity.
Asked by seth - Wed Dec 16 00:30:16 2009 - - 1 Answers - 0 Comments
What's the difference between GDP (official exchange rate) & GDP (purchasing power parity) ?
Q. Which indicator is more reliable? And why developing counties like China & Turkey have a much bigger GDP (PPP) than GDP (official exchange rate) ?
Asked by George - Mon Jun 1 05:45:30 2009 - - 1 Answers - 0 Comments
A. Cost of living:
Answered by simplicitus - Wed Jun 3 00:48:18 2009
Q. Which indicator is more reliable? And why developing counties like China & Turkey have a much bigger GDP (PPP) than GDP (official exchange rate) ?
Asked by George - Mon Jun 1 05:45:30 2009 - - 1 Answers - 0 Comments
A. Cost of living:
Answered by simplicitus - Wed Jun 3 00:48:18 2009
What is "purchasing power parity" and "portfolio investment"?
Q. Please give me a somewhat detailed explanation of these terms.
Asked by Shreya - Wed Jan 23 12:51:13 2008 - - 3 Answers - 0 Comments
A. Purchasing Power Parity simply meas that if the same product is sold in two freely trading countries, that product will always have the tendency to have the same price. For instance, if an iPod in US is sold for $70, and in Germany someone starts selling it for $100, someone will start to buy up US iPods, and resell them in Germany for the same $100, making a profit. Eventually more and more people will do this, everyone will start to compete and undercut each other, and sooner or later, that iPod will be sold for the same $70 in Germany as in US. The only difference in price may be the added shipping costs and import taxes. P.S. my example is an overly simplified one. PPP mostly reffers to exchange rates of the currencies of the two… [cont.]
Answered by rassah5 - Wed Jan 23 13:51:07 2008
Q. Please give me a somewhat detailed explanation of these terms.
Asked by Shreya - Wed Jan 23 12:51:13 2008 - - 3 Answers - 0 Comments
A. Purchasing Power Parity simply meas that if the same product is sold in two freely trading countries, that product will always have the tendency to have the same price. For instance, if an iPod in US is sold for $70, and in Germany someone starts selling it for $100, someone will start to buy up US iPods, and resell them in Germany for the same $100, making a profit. Eventually more and more people will do this, everyone will start to compete and undercut each other, and sooner or later, that iPod will be sold for the same $70 in Germany as in US. The only difference in price may be the added shipping costs and import taxes. P.S. my example is an overly simplified one. PPP mostly reffers to exchange rates of the currencies of the two… [cont.]
Answered by rassah5 - Wed Jan 23 13:51:07 2008
Purchasing power parity multichoice question?
Q. Here is a simple multichoice question, can someone please tell me the right answer and explain why its correct. Purchasing power parity says that the exchange rate between the currencies of any two countries: a)is stable only under a fixed exchange rate regime b)is managed by the buying and selling of foreign currencies by central banks in the two countries c)eventually adjusts to reflect the differences in the price levels in the two countries d)is volatile in the short run due to cyclical conditions in the two economies
Asked by xcmir - Sat Sep 20 05:53:01 2008 - - 1 Answers - 0 Comments
A. The correct answer is : c)eventually adjusts to reflect the differences in the price levels in the two countries Reason: Purchasing power parity means that the if one unit of a currency in country A is able to buy a certain quantity of goods in that country, then under free trade, the number of units of currency of country B that a unit of currency of country A can be exchanged for should be able to buy the same quantity of goods in country B in equilibrium. If the latter quantity is lower or higher, people in country A would buy less or more from the other country B and hence the demand for the currency B will decline or increase so that this arbitrage is not possible. For example, if a basket of goods can be bought with $1,000 in the… [cont.]
Answered by sensekonomikx - Sat Sep 20 13:34:55 2008
Q. Here is a simple multichoice question, can someone please tell me the right answer and explain why its correct. Purchasing power parity says that the exchange rate between the currencies of any two countries: a)is stable only under a fixed exchange rate regime b)is managed by the buying and selling of foreign currencies by central banks in the two countries c)eventually adjusts to reflect the differences in the price levels in the two countries d)is volatile in the short run due to cyclical conditions in the two economies
Asked by xcmir - Sat Sep 20 05:53:01 2008 - - 1 Answers - 0 Comments
A. The correct answer is : c)eventually adjusts to reflect the differences in the price levels in the two countries Reason: Purchasing power parity means that the if one unit of a currency in country A is able to buy a certain quantity of goods in that country, then under free trade, the number of units of currency of country B that a unit of currency of country A can be exchanged for should be able to buy the same quantity of goods in country B in equilibrium. If the latter quantity is lower or higher, people in country A would buy less or more from the other country B and hence the demand for the currency B will decline or increase so that this arbitrage is not possible. For example, if a basket of goods can be bought with $1,000 in the… [cont.]
Answered by sensekonomikx - Sat Sep 20 13:34:55 2008
Why do people think that India is poor while its purchasing power parity(PPP) is 3rd in the world?
Q. Well people say its a poor country but i disagree with them.Its GDP growth is 9.2 %,so it is one of the fastest growing economy in the world.Its asia's biggest IT centre and has over a million IT jobs. if u have any doubts visit
Asked by Kevin - Sun Jan 21 04:58:38 2007 - - 7 Answers - 0 Comments
A. cause when I get onto tech support with them, I can NEVER understand anything they are saying.
Answered by user name - Wed Jan 24 18:20:52 2007
Q. Well people say its a poor country but i disagree with them.Its GDP growth is 9.2 %,so it is one of the fastest growing economy in the world.Its asia's biggest IT centre and has over a million IT jobs. if u have any doubts visit
Asked by Kevin - Sun Jan 21 04:58:38 2007 - - 7 Answers - 0 Comments
A. cause when I get onto tech support with them, I can NEVER understand anything they are saying.
Answered by user name - Wed Jan 24 18:20:52 2007
What is the difference between the "Law of one price" and "Purchasing Power Parity?
Q. What is the difference between the "Law of one price" and "Purchasing Power Parity?
Asked by Invasion - Fri Aug 29 02:23:51 2008 - - 1 Answers - 0 Comments
A. The law of one price states that differing prices of a traded good will tend to equalize in the absence of tariffs, other barriers to trade and prohibitively high shipping rates. The law of one price can also be stated as: "In an efficient market all identical goods must have only one price." The purchasing power parity (PPP) theory is based on the law of one price and uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power. In other words, the PPP hypothesis is that free trade of goods will align exchange rates with their PPP values.
Answered by Felix_FINA4242 - Sun Aug 31 23:26:22 2008
Q. What is the difference between the "Law of one price" and "Purchasing Power Parity?
Asked by Invasion - Fri Aug 29 02:23:51 2008 - - 1 Answers - 0 Comments
A. The law of one price states that differing prices of a traded good will tend to equalize in the absence of tariffs, other barriers to trade and prohibitively high shipping rates. The law of one price can also be stated as: "In an efficient market all identical goods must have only one price." The purchasing power parity (PPP) theory is based on the law of one price and uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power. In other words, the PPP hypothesis is that free trade of goods will align exchange rates with their PPP values.
Answered by Felix_FINA4242 - Sun Aug 31 23:26:22 2008
What does PPP(purchasing power parity) try to do?
Q. i think i know it but i wanna make sure im right i dont want anything from wikipedia. im asking 4 u people to explain it
Asked by joes - Mon Feb 18 11:35:22 2008 - - 1 Answers - 1 Comments
A. Purchasing power parity The purchasing power parity (PPP) theory uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power. Developed by Gustav Cassel in 1920, it is based on the law of one price: the idea that, in an efficient market, identical goods must have only one price. A purchasing power parity exchange rate equalizes the purchasing power of different currencies in their home countries for a given basket of goods. It is often used to compare the standards of living between countries, rather than a per-capita gross domestic products comparison at market exchange rates. The best known and most used purchasing power parity exchange rate is the Geary-Khamis dollar, also referred to as the… [cont.]
Answered by Penny D - Mon Feb 18 11:43:00 2008
Q. i think i know it but i wanna make sure im right i dont want anything from wikipedia. im asking 4 u people to explain it
Asked by joes - Mon Feb 18 11:35:22 2008 - - 1 Answers - 1 Comments
A. Purchasing power parity The purchasing power parity (PPP) theory uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power. Developed by Gustav Cassel in 1920, it is based on the law of one price: the idea that, in an efficient market, identical goods must have only one price. A purchasing power parity exchange rate equalizes the purchasing power of different currencies in their home countries for a given basket of goods. It is often used to compare the standards of living between countries, rather than a per-capita gross domestic products comparison at market exchange rates. The best known and most used purchasing power parity exchange rate is the Geary-Khamis dollar, also referred to as the… [cont.]
Answered by Penny D - Mon Feb 18 11:43:00 2008
What is Purchasing Power Parity???????
Q. What is Purchasing Power Parity as it refers to the value of a nations currency. Also does purchasing power parity have any effect on a population's GDP and how wealthy the nation or region is???
Asked by big boy - Tue Jul 7 05:32:39 2009 - - 1 Answers - 0 Comments
A. I think it means equality of exchange.
Answered by Einstein - Fri Jul 10 19:06:36 2009
Q. What is Purchasing Power Parity as it refers to the value of a nations currency. Also does purchasing power parity have any effect on a population's GDP and how wealthy the nation or region is???
Asked by big boy - Tue Jul 7 05:32:39 2009 - - 1 Answers - 0 Comments
A. I think it means equality of exchange.
Answered by Einstein - Fri Jul 10 19:06:36 2009
purchasing power parity?
Q. Why are purchasing power parity adjustments made to international comparisons of per capita gross domestic product?
Asked by KiKi - Fri Apr 17 11:34:35 2009 - - 1 Answers - 0 Comments
Q. Why are purchasing power parity adjustments made to international comparisons of per capita gross domestic product?
Asked by KiKi - Fri Apr 17 11:34:35 2009 - - 1 Answers - 0 Comments
define purchasing power parity?
Q. define purchasing power parity and explain its relevance to the debate about whether to have a fixed or flexible exchange rate.
Asked by dmmeadors - Thu Jul 20 12:17:17 2006 - - 2 Answers - 0 Comments
A. hello my friend, According to me purchasing power is the power of a person to buy things from a seller at the price fixed by the seller.
Answered by Nirmal Jayagopalan - Thu Jul 20 12:30:38 2006
Q. define purchasing power parity and explain its relevance to the debate about whether to have a fixed or flexible exchange rate.
Asked by dmmeadors - Thu Jul 20 12:17:17 2006 - - 2 Answers - 0 Comments
A. hello my friend, According to me purchasing power is the power of a person to buy things from a seller at the price fixed by the seller.
Answered by Nirmal Jayagopalan - Thu Jul 20 12:30:38 2006
Purchasing power parity?
Q. A 14-year-old girl living in Brisbane, Queensland, purchases a new GameCube game system at Target for $150. The game is manufactured by the Nintendo Co. in Tokyo. Target pays Nintendo $100 for the game system. The other $50 covers the cost of workers, rent, and profit for Target. Nintendo exchanges the $100 at the First National Bank of Tokyo for 8,000 yen. The First National Bank of Tokyo loans the $100 to Mitsubishi, which uses it (and a lot of additional money) to expand its automobile manufacturing facility in South Australia. The 14-year-old girl reads in the newspaper that the exchange rate is 3 Malaysian ringgit per Australian dollar. What must the price of a GameCube system be in Malaysia for purchasing-power parity? (Express… [cont.]
Asked by de - Tue May 27 03:03:11 2008 - - 2 Answers - 0 Comments
A. Ringgit is Malaysian currency - like Dollar in US, Pound in UK. In Australia GameCube costs 150*3=450 Ringgits S=P1/P2 S=3 P2=150 P1=150*3=450 Ringgits Answ: GameCube price in Malaysia is 450 Ringgits But actually it's net very right, your question misses some real-life data, to be more precise you should take into account difference in price levels in these countries and nominal and real exchange rates. I hope it's right.
Answered by J - Sat May 31 05:50:06 2008
Q. A 14-year-old girl living in Brisbane, Queensland, purchases a new GameCube game system at Target for $150. The game is manufactured by the Nintendo Co. in Tokyo. Target pays Nintendo $100 for the game system. The other $50 covers the cost of workers, rent, and profit for Target. Nintendo exchanges the $100 at the First National Bank of Tokyo for 8,000 yen. The First National Bank of Tokyo loans the $100 to Mitsubishi, which uses it (and a lot of additional money) to expand its automobile manufacturing facility in South Australia. The 14-year-old girl reads in the newspaper that the exchange rate is 3 Malaysian ringgit per Australian dollar. What must the price of a GameCube system be in Malaysia for purchasing-power parity? (Express… [cont.]
Asked by de - Tue May 27 03:03:11 2008 - - 2 Answers - 0 Comments
A. Ringgit is Malaysian currency - like Dollar in US, Pound in UK. In Australia GameCube costs 150*3=450 Ringgits S=P1/P2 S=3 P2=150 P1=150*3=450 Ringgits Answ: GameCube price in Malaysia is 450 Ringgits But actually it's net very right, your question misses some real-life data, to be more precise you should take into account difference in price levels in these countries and nominal and real exchange rates. I hope it's right.
Answered by J - Sat May 31 05:50:06 2008
what is the definition of purchasing power parity (PPP) and how is it determined?
Q. what is the definition of purchasing power parity (PPP) and how is it determined?
Asked by rakesh_kumar_bhardwaj - Fri Jan 27 11:16:55 2006 - - 2 Answers - 0 Comments
A. Purchasing Power Parity - PPP A theory that supports the law of one price. The theory says that the price of one product should be the same across countries. So, the exchange rates should adjust to reflect this 'one-price' scenerio. Otherwise, international arbitage could incur until exchange rates adjust and the law of one price holds. For example, if bigmac costs 2 euro in Germany, and the same bigmac costs 100 thai baht in Thailand, then the exchange rate should be 50 baht per euro. If baht is depreciated in relative to euro (the exchange rate is more than 50 baht per euro), then Some German people will not buy any bigmac from Germany. Rather, they will import bigmac from Thailand (because Thai bigmacs are cheaper) and resell in… [cont.]
Answered by ichbinhier - Fri Jan 27 12:03:41 2006
Q. what is the definition of purchasing power parity (PPP) and how is it determined?
Asked by rakesh_kumar_bhardwaj - Fri Jan 27 11:16:55 2006 - - 2 Answers - 0 Comments
A. Purchasing Power Parity - PPP A theory that supports the law of one price. The theory says that the price of one product should be the same across countries. So, the exchange rates should adjust to reflect this 'one-price' scenerio. Otherwise, international arbitage could incur until exchange rates adjust and the law of one price holds. For example, if bigmac costs 2 euro in Germany, and the same bigmac costs 100 thai baht in Thailand, then the exchange rate should be 50 baht per euro. If baht is depreciated in relative to euro (the exchange rate is more than 50 baht per euro), then Some German people will not buy any bigmac from Germany. Rather, they will import bigmac from Thailand (because Thai bigmacs are cheaper) and resell in… [cont.]
Answered by ichbinhier - Fri Jan 27 12:03:41 2006
why doesn't purchasing power parity explain all exchange rate movements?
Q. why doesn't purchasing power parity explain all exchange rate movements?
Asked by Jason W - Fri Nov 30 20:29:05 2007 - - 2 Answers - 0 Comments
A. Currency speculation.
Answered by Andrew O - Tue Dec 4 17:33:26 2007
Q. why doesn't purchasing power parity explain all exchange rate movements?
Asked by Jason W - Fri Nov 30 20:29:05 2007 - - 2 Answers - 0 Comments
A. Currency speculation.
Answered by Andrew O - Tue Dec 4 17:33:26 2007
What does PPP(Purchasing Power Parity) mean?
Q. I meant "WHAT does GNI PPP per capita mean"? What is parity? And does GNI PPP per capita mean? I am so lost. This is all confusing! Any help would be very very much appreciated.
Asked by One of those days - Sat May 16 19:58:06 2009 - - 1 Answers - 0 Comments
A. I don't wanna write so check the OECD site : Purchasing Power Parities (PPPs) are currency conversion rates that both convert to a common currency and equalise the purchasing power of different currencies. In other words, they eliminate the differences in price levels between countries in the process of conversion. Also, check wiki out, it's understandable :
Answered by WTF - Sat May 16 20:03:04 2009
Q. I meant "WHAT does GNI PPP per capita mean"? What is parity? And does GNI PPP per capita mean? I am so lost. This is all confusing! Any help would be very very much appreciated.
Asked by One of those days - Sat May 16 19:58:06 2009 - - 1 Answers - 0 Comments
A. I don't wanna write so check the OECD site : Purchasing Power Parities (PPPs) are currency conversion rates that both convert to a common currency and equalise the purchasing power of different currencies. In other words, they eliminate the differences in price levels between countries in the process of conversion. Also, check wiki out, it's understandable :
Answered by WTF - Sat May 16 20:03:04 2009
Explain in details the purchasing power parity theory.?
Q. Internal economics
Asked by free4wena - Tue Nov 14 07:03:38 2006 - - 4 Answers - 0 Comments
A. The PPP basically says that the exchange rates should adjust such that the price of a product should be the same across the world (ignoreing transportation costs). So if a chair costs 5 Euros in Italy, and 2$ in Australia, then the PPP says that the exchange rate should be 2.5 Euros to the Australian dollar. Obviously using a chair is a trivial expamle, but it should apply across the broad range of goods, If say the exchange rate was 1 Euro to an Australian $, then people would buy chairs in Australia and sell them in Italy. Buying stuff in Australia, causes the demand for AU$ increases and selling stuff in Italy increases the supply of Euros, therefore AU$ get 'more expensive' with respect to the Euro; the AU$ appreciates with respect… [cont.]
Answered by ekonomix - Tue Nov 14 08:40:18 2006
Q. Internal economics
Asked by free4wena - Tue Nov 14 07:03:38 2006 - - 4 Answers - 0 Comments
A. The PPP basically says that the exchange rates should adjust such that the price of a product should be the same across the world (ignoreing transportation costs). So if a chair costs 5 Euros in Italy, and 2$ in Australia, then the PPP says that the exchange rate should be 2.5 Euros to the Australian dollar. Obviously using a chair is a trivial expamle, but it should apply across the broad range of goods, If say the exchange rate was 1 Euro to an Australian $, then people would buy chairs in Australia and sell them in Italy. Buying stuff in Australia, causes the demand for AU$ increases and selling stuff in Italy increases the supply of Euros, therefore AU$ get 'more expensive' with respect to the Euro; the AU$ appreciates with respect… [cont.]
Answered by ekonomix - Tue Nov 14 08:40:18 2006
Purchasing power parity(PPP)?
Q. Explain why the PPP theory of exchange rate determination works better in the long run as opposed to the short run
Asked by Paul S - Sat May 31 00:48:45 2008 - - 1 Answers - 0 Comments
A. The purchasing power parity (PPP) theory uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power. Developed by Gustav Cassel in 1920, it is based on the law of one price: the theory that, in an ideally efficient market, identical goods should have only one price. A purchasing power parity exchange rate equalizes the purchasing power of different currencies in their home countries for a given basket of goods. It is often used to compare the standards of living between countries, rather than a per-capita gross domestic product (GDP) comparison at market exchange rates. The best-known and most-used purchasing power parity exchange rate is the Geary-Khamis dollar (the "international dollar"). PPP… [cont.]
Answered by Wild Wild Jassi - Sat May 31 02:29:40 2008
Q. Explain why the PPP theory of exchange rate determination works better in the long run as opposed to the short run
Asked by Paul S - Sat May 31 00:48:45 2008 - - 1 Answers - 0 Comments
A. The purchasing power parity (PPP) theory uses the long-term equilibrium exchange rate of two currencies to equalize their purchasing power. Developed by Gustav Cassel in 1920, it is based on the law of one price: the theory that, in an ideally efficient market, identical goods should have only one price. A purchasing power parity exchange rate equalizes the purchasing power of different currencies in their home countries for a given basket of goods. It is often used to compare the standards of living between countries, rather than a per-capita gross domestic product (GDP) comparison at market exchange rates. The best-known and most-used purchasing power parity exchange rate is the Geary-Khamis dollar (the "international dollar"). PPP… [cont.]
Answered by Wild Wild Jassi - Sat May 31 02:29:40 2008
Anyone know what has been happening to purchasing power parity in India compared to US over last 10-15 yrs?
Q. I mean what has been the change in cost of living compared to the US over this period.
Asked by James T - Tue Jun 19 03:49:45 2007 - - 3 Answers - 0 Comments
A. The figures have not changed from 2005 Per USD 1 million (GDP) PPP of India: 3,729,533 (IMF) 3,779,044 (World Bank)
Answered by chamkadaar - Tue Jun 19 04:32:27 2007
Q. I mean what has been the change in cost of living compared to the US over this period.
Asked by James T - Tue Jun 19 03:49:45 2007 - - 3 Answers - 0 Comments
A. The figures have not changed from 2005 Per USD 1 million (GDP) PPP of India: 3,729,533 (IMF) 3,779,044 (World Bank)
Answered by chamkadaar - Tue Jun 19 04:32:27 2007
power purchasing parity?
Q. What does it mean if a country's PPP is $200 and anothers is $40 000.
Asked by lily89 - Wed Sep 2 19:00:42 2009 - - 1 Answers - 0 Comments
A. I think you are talking about PPP GDP. It means (in theory) that in one country, average resident has same quality of life as somebody who earns $40,000/year does in US, while in the other, it's the same deal but with $200/year. In practice, PPP GDP is computed through complicated process of matching prices of same goods in different countries, and it is hard to do when different countries do not have many similar goods. Which leads to unusually high or low results. On top of that, PPP only refers to monetary income, so $200/year could mean that person grows his own food, lives in a hut that built from salvaged materials, wears clothes that others thew out, and only uses money to replace simple farming tools when they break.
Answered by Bored Goblin - Wed Sep 2 19:29:35 2009
Q. What does it mean if a country's PPP is $200 and anothers is $40 000.
Asked by lily89 - Wed Sep 2 19:00:42 2009 - - 1 Answers - 0 Comments
A. I think you are talking about PPP GDP. It means (in theory) that in one country, average resident has same quality of life as somebody who earns $40,000/year does in US, while in the other, it's the same deal but with $200/year. In practice, PPP GDP is computed through complicated process of matching prices of same goods in different countries, and it is hard to do when different countries do not have many similar goods. Which leads to unusually high or low results. On top of that, PPP only refers to monetary income, so $200/year could mean that person grows his own food, lives in a hut that built from salvaged materials, wears clothes that others thew out, and only uses money to replace simple farming tools when they break.
Answered by Bored Goblin - Wed Sep 2 19:29:35 2009
From Yahoo Answer Search: 'Purchasing Power Parity'
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Moreover, average GDP per capita ( purchasing power parity adjusted) was $11 887 over the period for the sample of flat tax countries, compared to South ...
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Thailand has the 21st largest economy in the world when measured by gross domestic product (GDP) derived from . Purchasing Power Parity. (PPP) calculations. According to the CIA World Fact Book 2007, Thailand's economy is more productive ...
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