Economy, asked by IamRahul3746, 6 months ago

Explain the purchasing power parity theory of exchange rate determination?

Answers

Answered by Shreya2202
1

Answer:

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Answered by ad822704
1

Answer:

Purchasing power parity (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries.

Explanation:

Purchasing power parity (PPP) is a theory which states that exchange rates between currencies are in equilibrium when their purchasing power is the same in each of the two countries. ... The basis for PPP is the "law of one price".

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