[{"data":1,"prerenderedAt":53},["ShallowReactive",2],{"term:purchasing-power-parity":3},{"term":4,"related":44},{"id":5,"title":6,"body":7,"category":27,"description":28,"extension":29,"faq":30,"meta":31,"navigation":32,"path":33,"related":34,"seo":37,"stem":38,"takeaways":39,"__hash__":43},"terms\u002Fterms\u002Fpurchasing-power-parity.md","Purchasing Power Parity (PPP)",{"type":8,"value":9,"toc":22},"minimark",[10,15,19],[11,12,14],"h2",{"id":13},"understanding-purchasing-power-parity","Understanding Purchasing Power Parity",[16,17,18],"p",{},"Purchasing power parity compares the cost of a common basket of goods across countries. If a basket costs more in one country after converting currencies, PPP suggests that country's currency is overvalued.",[16,20,21],{},"Economists also use PPP exchange rates to compare GDP and living standards, because a dollar buys more in some countries than others.",{"title":23,"searchDepth":24,"depth":24,"links":25},"",2,[26],{"id":13,"depth":24,"text":14},"economy","The idea that exchange rates should adjust so the same goods cost the same in different countries.","md",[],{},true,"\u002Fterms\u002Fpurchasing-power-parity",[35,36],"exchange-rate","gdp",{"title":6,"description":28},"terms\u002Fpurchasing-power-parity",[40,41,42],"PPP compares what money can buy in different countries.","Actual exchange rates can stay far from PPP for years.","PPP-adjusted GDP is better for comparing living standards.","t2Wg41cvROegHUzFj-4BHn6Hlta5xma5Sjx8oV7XsDk",[45,49],{"title":46,"description":47,"path":48},"Exchange Rate","The price of one currency expressed in another.","\u002Fterms\u002Fexchange-rate",{"title":50,"description":51,"path":52},"Gross Domestic Product (GDP)","The total value of goods and services produced in a country over a period.","\u002Fterms\u002Fgdp",1793374005704]