What is Purchasing Power Parity? How to measure its effects on economy?

Its  is estimates the amount of adjustment needed on the exchange rate between countries in order for the exchange to be equivalent to each currency's purchasing power.

It can measure in two wasy 

• Absolute PPP - in which all good and service are included regardless of trade able or non trade able goods
• Relative PPP in which relative price are used  like Pna/Poa /Pnb/Pob