Purchasing power parity
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Purchasing power parity is a concept that implies that the level of exchange rates adjusts so that identical goods cost the same in different countries. Sometimes referred to as the “law of one price.”
Definitions
According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),
- Purchasing power parity. Implies that the level of exchange rates adjusts so that identical goods cost the same in different countries. Sometimes referred to as the “law of one price.”
Related concepts
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
