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Relative form of purchasing power parity |
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Relative form of purchasing power parityTheory that the rate of change in the prices of products should be somewhat similar, but not absolutely the same when measured in a common currency, as long as transportation costs and trade barriers are unchanged.Relative form of purchasing power parity Similar MatchesPurchasing powerPurchasing powerThe amount of credit available for credit trading in a credit, after taking credit into consideration. Purchasing power of the dollarPurchasing power of the dollarThe amount of goods and services that can be exchanged for a dollar as compared with amount of a previous time period. Absolute form of purchasing power parityAbsolute form of purchasing power parityA theory that prices of products of two different countries should be equal when measured by a common currency. Also called the "law of one price." Purchasing power parity exchange ratePurchasing power parity exchange rateAn exchange rate calculated to yield absolute purchasing power parity. Useful for making comparisons of real values (wages, GDP) across countries with different currencies. Since the purchasing power parity theory is rarely correct, this contrasts with the nominal exchange rate. Purchasing power riskPurchasing power riskRelated: Inflation risk Further SuggestionsPurchasing power parity theoryPurchasing power Purchasing power parity Purchasing power parity purchasing power |
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