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Economics (AS & A Level) · Oct / Nov 2023 · Paper 31 · Question 28

9708Economic development

Purchasing power parity (PPP) allows a comparison of the purchasing power in two countries. What is a definition of PPP?

  1. Athe amount of the domestic currency needed to purchase a unit of foreign currency
  2. Bthe quantity of a currency required to purchase the same basket of goods in both countries
  3. Cthe quantity of goods and services that can be purchased by a person on an average income
  4. Dthe value of expenditure by households on goods and services in a country

As printed in the paper

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Correct answer: B. the quantity of a currency required to purchase the same basket of goods in both countries

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