Which Of The Following Is Referred To As The Purchasing Power Parity Puzzle?

Which Of The Following Is Referred To As The Purchasing Power Parity Puzzle? The real exchange-rate puzzles is a common term for two much-discussed anomalies of real exchange rates: that real exchange rates are more volatile and show more persistence than what most models can account for. These two anomalies are sometimes referred to as

What Are The Importance Of Foreign Exchange In An Economy?

What Are The Importance Of Foreign Exchange In An Economy? Foreign exchange is important for one major reason: it determines the value of foreign investment. A volatile exchange rate discourages foreign investment, as does a high, stable one. A low, stable exchange rate, however, encourages foreign investment, but at the price of the low-valued currency’s