Question

Many a time we read a term "PPP" in financial newspapers. What is the full form of the same as used in financial world?

• A. Public Per Capita Power
• B. Per Capita Potential Purchases
• C. Purchasing Power Parity
• D. Present Purchasing Power

Answer 1

The correct option is C Purchasing Power Parity

The acronym PPP stands for, "Purchasing Power Parity". It is a method of currency valuation that tells us that the exchange rate between two countries must be equal to the ratio of the currencies' respective purchasing power. ie. two identical goods should eventually cost the same in different countries once adjusted for purchasing power parity.