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Under What Circumstances Does Purchasing-Power Parity Explain How Exchange Rates

question 114

Essay

Under what circumstances does purchasing-power parity explain how exchange rates are determined, and why is it not completely accurate?


Definitions:

Evaluate

To determine the worth of a given expression.

Simplify

To reduce a mathematical expression to its simplest form.

Simplify

To alter a mathematical expression or equation to make it easier to understand or work with, often by reducing it to its simplest form.

Evaluate

To evaluate in mathematics means to calculate the value of an expression by substituting numbers for variables and performing the indicated operations.

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