Money & WorkFact

Why €1,000 buys more in Lisbon than in Zurich.

Comparing incomes across countries by exchange rate alone distorts the picture: a haircut in Sofia costs a fraction of one in Copenhagen. Purchasing power parity corrects this by asking what a basket of goods really costs locally. Many gaps shrink considerably once adjusted.

Useful: When comparing wages across countries, check whether they are PPP-adjusted.

Source: de.wikipedia.org

BipVergleichWirtschaft

Difficulty:

Related cards

How to fit an entire economy into one formula.The expenditure approach adds four items: private consumption, business investment, government …
Cook for your family and GDP drops. Almost.Gross domestic product only counts what is produced for money. If you cook yourself, care for your …
One hour of work a week and you aren't unemployed.Under the International Labour Organization definition, which Eurostat also uses, anyone who worked …
Falling prices sound great. Economists fear them more than inflation.If everything is cheaper tomorrow, you postpone buying. Firms sell less, cut prices, cut jobs, and …
Inflation has two engines, and they need different brakes.Demand-pull inflation happens when too much money chases too few goods, for instance after stimulus …
Trade pays off even if you're better at everything.David Ricardo showed in 1817: even if Portugal makes both wine and cloth more cheaply than England …
How a price emerges without anyone setting it.If a price is too high, goods sit unsold and sellers lower it. If too low, shelves empty and buyers …
A price is a message nobody wrote.Friedrich Hayek described in 1945 why prices are more than numbers: when the price of tin rises …

Keep reading

This card belongs to the topic Money & Work. Every card is short, cites a source and can be saved – due ones come back by themselves later.

About Doomlearn · Projects · Legal notice · Privacy · Terms