What is Purchasing Power Parity? What does it measure?

Question

In a recent research, they say that PPP of two countries is like this:

Luxembourg: 272

Turkey: 42

What is difference between these two countries? Luxembourg is 6.5 times greater than Turkey. But by what? What does PPP measure?

Thanks.

Answer 1

ppp is simply application of law of one pricce what it is that price rtio of goods in both countries

luxemburgs currency is 6.5 times as expensive as turkey.....

that too depends on who believes it! i mean he exact figs..