Purchasing power based exchange rate is a more useful measure than market exchange rate to compare Gross Domestic Product (GDP) across countries.

This statement suggests that Purchasing Power Parity (PPP) is a more useful measure than market exchange rates when comparing Gross Domestic Product (GDP) across countries. Here's why:

1. Understanding Market Exchange Rates: Market exchange rates are determined by the supply and demand of different currencies in the foreign exchange market. They can fluctuate due to various factors such as interest rates, inflation, political stability, and economic performance.

2. Understanding Purchasing Power Parity (PPP): PPP is an economic theory that compares different countries' currencies through a "basket of goods" approach. It tries to calculate how much a specific amount of money can purchase in different countries, considering the cost of living and inflation rates.

3. Comparing GDP: When comparing the GDP of different countries, using market exchange rates may not reflect the true size of an economy. This is because market exchange rates are influenced by factors like speculation, government intervention, and import/export demand, which may not accurately represent a country's domestic economic activity.

4. Advantage of PPP: PPP, on the other hand, takes into account the relative cost of living and the inflation rates of the countries. Therefore, it provides a more realistic comparison of the standard of living between countries. For example, a haircut's price varies significantly from New York to Delhi. By using PPP, we can compare what a dollar can buy in both countries, giving a more accurate picture of economic productivity and living standards.

5. Limitations of PPP: However, PPP also has its limitations. It is based on the assumption that goods and services are priced the same across different countries, which is not always the case due to factors like transportation costs and taxes. Moreover, it can be challenging to compare a diverse range of goods and services across countries.

In conclusion, while both measures have their pros and cons, PPP is often considered a more useful measure than market exchange rates when comparing GDP across countries, as it provides a more realistic picture of the economic productivity and living standards.