What does the term PPP represent?

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A theory stating that currency exchange rates are balanced when the purchasing power is equal in two nationsThe gross domestic product divided by the currency exchange rateAn indicator used to assess income distribution disparitiesA statistic measuring infant death rates in less developed countries

Explanation

PPP refers to a theory that explains how exchange rates between currencies reach equilibrium when the purchasing power in both countries is equivalent. It is not related to GDP calculations, income inequality measures, or infant mortality statistics.