Purchasing power parity:Purchasing power parity (PPP)is a theory of exchange rate determination and a way to compare the average costs of goods and services between countries.The theory assumes that the actions of importers and exporters motivated by cross country price differences,induces changes in the spot exchange rate.capital account,induces changes in the exchange rate 数更价首5大考Purchasing power parity: Purchasing power parity (PPP) is a theory of exchange rate determination and a way to compare the average costs of goods and services between countries. The theory assumes that the actions of importers and exporters motivated by cross country price differences, induces changes in the spot exchange rate. capital account, induces changes in the exchange rate