In general, purchasing power parity is a comparison between the purchasing power of a domestic currency with which of the following currencies?

Indian rupee

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US dollar

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Euro

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Yen

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Solution

The correct option is B US dollar
Purchasing power parity is defined as the number of units of a country’s currency required to buy the same amount of goods and services in the domestic market as one dollar would buy in the USA. Thus, it is a comparison between the domestic currency and the US dollar.

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