international currencies

What Causes Deviations From Purchasing Power Parity?

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What Causes Deviations From Purchasing Power Parity? Nontradables also lead to deviations in PPP because the prices of nontradables are not linked internationally. The prices are determined by domestic supply and demand, and shifts in those curves lead to changes in the market basket of some goods relative to the foreign price of the same

How Do Exchange Rates Affect International Markets?

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How Do Exchange Rates Affect International Markets? A higher-valued currency makes a country’s imports less expensive and its exports more expensive in foreign markets. A lower-valued currency makes a country’s imports more expensive and its exports less expensive in foreign markets. How does exchange rate affect international trade? The exchange rate has an effect on