Question

Why do economist adjust international statistics based on purchasing power?

Why do economist adjust international statistics based on purchasing power?

Homework Answers

Answer #1

It can actually be mentioned that the current state of an economy and condition depends on thepurchasing power because of purchasing power can actually determine the standard of living in a particular country and determines how valid the income of an individual in a particular Nation on the whole and for instance the amount of income in Sweden and India if same in India you will be considered as rich and in Sweden you can be considered as poor that is the reason why an economist usually adjust international statistics based on the purchasing power on the whole.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
The economist state the empirical tests of purchasing power parity have, for the most part, not...
The economist state the empirical tests of purchasing power parity have, for the most part, not proved PPP to be accurate in predicting future exchange rates. The economist then state that FPP does hold up reasonably well in two situations. What are two reasons why PPP does not accurately predict future exchange rates, and under what two conditions might we reasonably expect PPP to hold?
1.   What is the theory of purchasing power parity? Why would purchasing power parity hold? What...
1.   What is the theory of purchasing power parity? Why would purchasing power parity hold? What is the evidence on purchasing power parity: does it hold or not? If there are deviations from purchasing power parity, why are there deviations? Please provide any evidence or research available on these issues. Please provide reference websites
What is the difference between Interest Rate Parity, Purchasing Power Parity, and International Fisher Effect?
What is the difference between Interest Rate Parity, Purchasing Power Parity, and International Fisher Effect?
Do you think value based purchasing is important to the operation of US healthcare? Why or...
Do you think value based purchasing is important to the operation of US healthcare? Why or why not?
Firms entering international markets typically do not need to adjust their marketing strategies. True False
Firms entering international markets typically do not need to adjust their marketing strategies. True False
Assume that prices adjust slowly (fixed in the short run), so that purchasing power does not...
Assume that prices adjust slowly (fixed in the short run), so that purchasing power does not hold even for easily tradable baskets. The US dollar depreciates relative to the Canadian dollar. Goods are getting cheaper in __________. What is the effect on US Net Exports? (increase or decrease or no change) The Japanese Yen appreciates relative to the Chinese Yuan. Goods are getting cheaper in __________. What is the effect on Japanese Net exports? (increase or decrease or no change)
Answer the following questions regarding International Finance. What do we mean by ‘Purchasing Power Parity’? Explain....
Answer the following questions regarding International Finance. What do we mean by ‘Purchasing Power Parity’? Explain. A beer in the United States sells for $4. The same beer can sell for €3 in France. The current nominal exchange rate is $1.08/€. Calculate the real exchange rate of the French beer per US beer (use two decimal points). Based on your response, is beer relatively more expensive in the US or in France? Show your work and explain. Use the market...
What is purchasing power parity? Why would a government want to keep its currency undervalued? What...
What is purchasing power parity? Why would a government want to keep its currency undervalued? What transactions does a central bank need to do to keep its currency undervalued?
Why do you need to adjust the second lens of a telescope to create a sharp...
Why do you need to adjust the second lens of a telescope to create a sharp image? What are you actually trying to do?
According to the theory of purchasing power parity, in a country with low inflation, a. nominal...
According to the theory of purchasing power parity, in a country with low inflation, a. nominal exchange rate will depreciate in response to its relatively low rate of inflation b. real exchange rate will adjust in response to inflation differentials. c. nominal exchange rate will adjust in response to inflation differentials so that the value of the real exchange rate is always one. d. has no effect on the nominal or real exchange rate what so ever.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT