CBSE Class 12-commerce Answered
What is purchasing power parity?
Asked by Topperlearning User | 19 Apr, 2016, 12:42: PM
Expert Answer
Purchasing power parity refers to the ratio of purchasing power of the currencies of trading partners. It is the ratio of price levels in different nations. Thus, exchange rate between the two nations is equal to the ratio of the price levels in the two nations.
Rate of exchange = P1/P2
P1- Price level in nation 1 and P2- Price level in nation 2
Answered by | 19 Apr, 2016, 02:42: PM
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ANSWERED BY EXPERT
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ANSWERED BY EXPERT
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Asked by Topperlearning User | 19 Apr, 2016, 12:42: PM
ANSWERED BY EXPERT
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Asked by Topperlearning User | 19 Apr, 2016, 12:42: PM
ANSWERED BY EXPERT