If purchasing power parity holds and one cannot make money from buying footballs in one country and selling them in the other, then 30 Coffeeville Pesos must now be worth 20 Mikeland Dollars. If 30 Pesos = 20 Dollars, then 1.5 Pesos must equal 1 Dollar. Thus the Peso-to-Dollar exchange rate is 1.5, To calculate purchasing power parity, you’ll first need to gather the cost of a particular good between one currency and another. But exchange rates apply to every purchase you make in another country, as you likely already know, so you’ll need to know the exchange rate for each of the currencies you’re comparing. Purchasing power parity. When making comparisons between countries which use different currencies it is necessary to convert values, such as national income (GDP), to a common currency. This can be done it two ways: Using market exchanges rates, such as $1 = ¥200, or: Using purchasing power parities (PPPs) Market exchange rates