In the HDI context, what does PPP in GNI per capita (PPP) stand for?

• A. Purchasing Power Parity
• B. Public Private Partnership
• C. Price Parity Principle
• D. Personal Purchasing Power

Answer: (A)

Purchasing Power Parity is the term used here. In the HDI, GNI per capita (PPP) adjusts income to reflect what money can actually buy in each country, using a common basket of goods and services and expressing results in international dollars. This removes distortions from different price levels and exchange rates, so we compare living standards rather than just nominal incomes. For example, a dollar buys more in a cheaper country, which PPP accounts for, yielding a more meaningful cross-country comparison. The other options don’t fit this context: Public Private Partnership refers to collaboration between sectors, not income measurement; Price Parity Principle and Personal Purchasing Power aren’t standard terms used in HDI measurements.