Examlex
All of these are approaches except:
Purchasing Power Parity
A theory that states the exchange rates between two currencies are in equilibrium when their purchasing power is the same in both countries.
Foreign Exchange Market
A global marketplace for exchanging national currencies against one another, fundamental for international trade and investment.
Relative PPP
Stands for Relative Purchasing Power Parity, a theory that suggests that in the long term, exchange rates should adjust so that similar goods cost the same in different countries.
UIP
Uncovered Interest Parity, a financial theory stating that the difference in interest rates between two countries will equal the expected change in exchange rates between their currencies.
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