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Is PPP a Theory of Exchange Rate Determination? Explain Why

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Is PPP a theory of exchange rate determination? Explain why or why not?


Definitions:

Days

A unit of time equivalent to 24 hours, often used to measure durations or intervals.

Grow

To grow or expand in size, volume, or intensity as time progresses.

Annual Rate

The interest rate for a loan or investment over the span of one year.

Simple Interest

Interest calculated only on the principal amount, not on the interest accrued.

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