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Purchasing-Power Parity
An economic theory that states that the exchange rate between two currencies is equal to the ratio of the currencies' respective purchasing powers.
Inflation
A rise in the general level of prices of goods and services in an economy over a period of time, eroding purchasing power.
Depreciate
A decrease in the value of an asset over time, often due to wear and tear or obsolescence.
Nominal Exchange Rate
The rate at which one country's currency can be exchanged for another country's currency without adjustment for inflation rates.
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