purchasing power parity Meaning in the Cambridge English Dictionary Cambridge dictionaries logo

Meaning of “purchasing power parity” in the English Dictionary

"purchasing power parity" in Business English

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purchasing power paritynoun [U]

uk   us   ( abbreviation PPP) ECONOMICS
a ​measure of how much one ​unit of a ​currency would ​buy in different countries, ​calculated by comparing the ​price of one or more particular ​products in each country. Purchasing ​powerparity is used to ​judge if ​currencyexchangerates are ​correct in relation to what can be ​bought with different ​currencies: The ​theory of ​purchasingpowerparity says that, over ​time, ​exchangerates should ​equalize the ​prices of an identical basket of ​goods and ​services in any two countries.
(Definition of purchasing power parity from the Cambridge Business English Dictionary © Cambridge University Press)
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