Economics question.Purchasing Power Parity, measures how much it costs to purchase the same 'basket of goods' in different countries.?

This must be in relation to mean or average income, but either would produce different results. Which one is used?

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  • Oiy
    Lv 5
    1 month ago

    There is no relation to income but the exchange rate. The difference of prices is adjusted by exchange rate if it is free, assumably. A burger should cost the same everywhere as the US as a mean income country.

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    • Lv 4
      1 month agoReport

      ..which can all have pricing effects due to local agricultural conditions: eg: realistically, where avocadoes are fairly lower priced, apples may be comparatively pricey, & vv; such measures may be more effective if applied to determine eg percentages of income expended for food, taxes, shelter,etc 

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  • Anonymous
    1 month ago

    It's a set of products.

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