Frequently Asked Questions (FAQs)

• What is Purchasing Power Parity (PPP)?
  PPP is a theory which states that in the absence of transportation costs and other barriers, identical goods or services should have the same price when expressed in a common currency.
• Why is PPP important?
  PPP is used to compare economic productivity and standards of living between countries.
• How is PPP calculated?
  PPP is calculated using the formula: PPP = Price of a basket of goods in one country / Price of the same basket of goods in another country.
• What does PPP tell us about exchange rates?
  PPP is used to determine if a currency is undervalued or overvalued based on the exchange rates between two countries.
• How can I use this PPP calculator?
  Simply input the amount in your home currency, select the currencies involved, and enter the exchange rate to calculate the PPP.
• What is the exchange rate?
  The exchange rate is the value of one currency in relation to another currency.
• Can this calculator be used for all currencies?
  This calculator supports a range of currencies, but you can add more currencies for a broader analysis.
• Is the calculator real-time?
  For real-time data, you would need to integrate an API. This calculator uses manual inputs.
• What is the role of inflation in PPP?
  Inflation affects the prices of goods and services and thus impacts the PPP between two countries.
• Can I compare multiple countries using PPP?
  Yes, you can compare the PPP between various countries by using the respective exchange rates.