Evaluate the following statements about Purchasing Power Parity (PP

Statement I is correct. PPP is a measure of the price levels across countries that describes the cost of a standard basket of goods and services in different economies. It underpins the idea that in the long run, exchange rates should equalize the purchasing power of currencies. The Big Mac Index, published by The Economist, is a lighthearted application of this concept. PPP-adjusted GDP figures are used by the World Bank and IMF to make more meaningful international comparisons of economic output. Statement II is incorrect. PPP-adjusted GDP per capita is higher than nominal GDP per capita in developing economies where the general price level is lower than in advanced economies (which means the currency has more purchasing power domestically than the exchange rate suggests). But for high-income countries with relatively high price levels, the nominal GDP per capita can actually be higher than or equal to the PPP-adjusted figure. So the statement is not universally true.