Purchasing Power Parity Explained
10:17
YouTubeEPM
Purchasing Power Parity Explained
In this video, we explore and explain purchasing power parity (PPP) with plenty of examples. Video timeline: - Introduction - Why use purchasing power parity? 00:54 - Purchasing Power parity in-depth example 01:26 - Real-world example 03:53 - The Big Mac index 06:53 - Advantages & Disadvantages 08:16 - Our Take 09:22 To read the companion ...
24.5K viewsMay 13, 2024
Purchasing Power Parity Explained
What Is Purchasing Power Parity (PPP), and How Is It Calculated?
What Is Purchasing Power Parity (PPP), and How Is It Calculated?
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A case study in the chapter analyzed purchasing power parity for several countries using the price of Big Macs. Here are data for a few more countries: a. For each country, compute the predicted exchange rate of the local currency per U.S. dollar. (Recall that the U.S. price of a Big Mac was .93.) b. According to purchasing-power parity, what is the predicted exchange rate between the Hungarian forint and the Canadian dollar? What is the actual exchange rate? c. How well does the theory of purch
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