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The images show the cost of the same bike in the United States and Britain.

The concept shown in the images is known as
purchasing power parity.
exchange rates.
factors of production.
gross domestic product.

2 Answers

6 votes

Answer:

purchasing power parity edgenuitry

Step-by-step explanation:

User J Pimmel
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6 votes

The correct answer is: "Purchasing Power Parity"

The theory of the Purchasing Power Parity is used to compare the cost of life and living standards between two countries that use two different currencies. This is done by comparing two curriencies through a basket of goods, by comparing their market prices and, therefore, how they are valued under each currency. This enables to conclude how much of each currency you need to purchase an specific product (a bike) and hence, the purchasing power of consumers who hold that currency.

User Oshyshko
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