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Purchasing Power Parity: Purchasing Power Parity (PPP) is definitely an economic theory that measures the volume of adjustment needed on the exchange rate between different countries make certain that the exchange to be equivalent on the purchasing power of each currency. Simply, PPP may be the amount were required to buy a certain basket of products that can be bought in the given country with the money it created.
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Somebody in US might be making money, but they are surely not saving when the prices are particularly high and the value of services you receive in US is very less. This is due to the 'Purchasing Power Parity'.
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