Using powdered sugar in a recipe that calls for granulated sugar means substituting 1 3/4 cups of powdered sugar for every 1 cup of granulated sugar the recipe calls for. However, baked goods such as cookies and cakes will not rise as well with powdered sugar.
Do not use powdered sugar in recipes that are already thickened to a desired point. Powdered sugar contains a small amount of cornstarch which acts as a thickening agent in cooking. Powdered sugar is granulated sugar that has been crushed into a finer powder. It is most often used in homemade frosting recipes and as a sweetener for foods such as French Toast.