The number of units of developing country currency required to purchase a basket of goods and services in a developing country that costs one dollar in the U.S.is given by
A)GNI price deflator.
B)Human Development Index ranking.
C)purchasing power parity.
D)the exchange rate.

Question

Quizplus · Accepted Answer

The concept of purchasing power parity (PPP) is used to determine the relative value of currencies between countries. It is calculated by comparing the prices of an identical basket of goods and services in different countries. In this case, the number of units of developing country currency required to purchase a basket of goods and services in a developing country that costs one dollar in the U.S. is a measure of PPP. Therefore, the correct answer is C.

The Number of Units of Developing Country Currency Required to Purchase