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Though useful, purchasing power parity does not completely explain long-run movements in exchange rates due to
Predictable Patterns
Regular and expected trends or behaviors that can be anticipated based on past occurrences or established tendencies.
Difficult Behaviors
Actions or reactions that are challenging to manage or deal with, often causing disruption or conflict.
Distributive Tactics
Negotiation strategies focused on dividing limited resources or outcomes such that gains for one party are offset by losses for another.
More Power
Having increased influence, control, or authority over others or over a situation.
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