Explain Purchasing Power Parity

question 95

Essay

Explain purchasing power parity.

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Definitions:

Preexisting Duty

An obligation that a party is already legally required to perform, which cannot serve as valid consideration for a new contract.

Valid Consideration

Something of value exchanged between parties in a contract, which is necessary for the contract to be legally enforceable.

Unilateral Contract

An agreement in which one party makes a promise in exchange for the other party's action but does not require a reciprocal promise to act.

Preexisting Duty Rule

A legal principle that states an existing duty cannot serve as consideration for a new contract, but modifications can occur if additional or new consideration is provided.