GPN 66 PPP

What does Purchasing Power Parity (PPP) try to show?

• The amount of money you can save

• How much your money will buy in different countries

• The exchange rate between two currencies

• The inflation rate in a country.

Which global grouping has openly said PPP is flawed (but still useful)?

• World Bank

• IMF

• United Nations

• WTO

In which country is gas not used in heating, affecting the PPP basket?

• United States

• United Kingdom

• Singapore

• Switzerland

What is the purpose of the Big Mac index?

• To compare the cost of living in different countries

• To measure inflation rates

• To compare the cost of a Big Mac to the average hourly wage

• To determine exchange rates.

Which news agency set up the Big Mac Index?

• BBC

• Economist

• New Scientist

• New York Times

Which of the following is NOT a factor in the PPP basket?

• Rent of an apartment

• Cost of a Big Mac

• Electricity rates

• 1kg of the country’s main carbohydrate.

In Singapore, only ___% of the population own a car, so this cost distorts PPP for the country

• 11

• 3

• 27

• 39

What does GNI stand for?

What is the main purpose of PPP?

• To measure inflation

• To compare cost of living across countries

• To determine exchange rates

• To calculate GDP

PPP stands for