Question-   What Is Purchasing Power Parity (PPP)?



  1. Purchasing power parity (PPP) is a term used to calculates the relative differences in the value of different currencies across different countries. It is necessary to express GDP per capita (or GNI per capita) in PPP US$ because when calculating GDP per capita, or GNI per capita, purchasing power parity (PPP) gives a more accurate picture about a country’s overall standard of living.
  2. Gross National Income (GNI) measures total value added from domestic and foreign sources claimed by residents. It is a broader measure of national income. GNI is related to related to GDP as follows: GNI = GDP + Net receipts of primary income from foreign sources
  3. The country with the highest incidence of poverty is Uganda. Reason: Lowest GDP per capita of us$1,718, lowestGNI per capita of 1,670, and highest%population living below income poverty line of34.6.
  4. Human Poverty is the lack of essential human capabilities such as literacy or nourishment and income Poverty is the lack of minimal adequate income
  5. The Multidimensional Poverty Index (MPI) refers an international measure of sharp poverty over 100 developing countries. It balances the traditional income-based poverty is measures by confining the severe deficiency that each individual face at the same time with respect to health standard of living and education.
  6. Germany is the most developed. Reason: Germany has the highest GDP per capita 43,415, highest GNI per capita 45,000, highest Human Development Index (HDI) 0.926, and very high human development category.
  7. Multidimensional Poverty Index is defined as an index which identifies multiple or various deprivation at the household and individual. It reflects both incidents of its deprivation and its intensity. It uses a range of indicators to calculate summary poverty figure for a given population. Or in other words it can be explained as a person who has suffered multiple disadvantages at the same time, or deprived of or having poor health, malnutrition, lack of clean water, electricity, etc. the basic daily needs are deprived or unable to get.
    • Limitations of multidimensional poverty index:
      • the indicators may not reflect capabilities but reflects output or input.
      • the health data are relatively weak and overlook some groups.
      • intra house inequalities are severe and cannot be reflected.
      • It doesn't measure inequality among poor.
      • it is difficult to address all element since poverty is a complex issue. indicators of poverty may vary each other
      • data gathering is a challenging job which lead to more additional work for agency to achieve reasonable results









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