In the United States, the inflation rate is most commonly measured by the percentage rise in the Consumer Price Index, which is reported monthly by the Bureau of Labor Statistics (BLS). A CPI of 120 in the current period means that it now takes $120 to purchase a representative basket of goods that $100 once purchased.
Paraphenylenediamine (PPD) is a chemical substance that is widely used as a permanent hair dye. It may also been found in textile or fur dyes, dark coloured cosmetics, temporary tattoos, photographic developer and lithography plates, photocopying and printing inks, black rubber, oils, greases and gasoline.
Assume that the price level ratio PCAD/PUSD implies a PPP exchange rate of 1.3 CAD per 1 USD. If today's exchange rate ECAD/USD is 1.5 CAD per 1 USD, PPP theory implies that the CAD will appreciate (get stronger) against the USD, and the USD will in turn depreciate (get weaker) against the CAD. Relative PPP refers to rates of changes of price levels, that is, inflation rates.