Which of the following statements is true of purchasing power parity (PPP)?
A) It is the sum of value added by residents and households operating in an economy.
B) It is the management of value-added activities in other countries.
C) It is an investment made by firms within an industry in other countries.
D) It is an adjustment to reflect the differences in cost of living among different countries.

Question

Quizplus · Accepted Answer

Purchasing power parity (PPP) is an economic theory that allows the comparison of the purchasing power of various world currencies to one another, adjusting for differences in cost of living and inflation rates.

Which of the Following Statements Is True of Purchasing Power