Purchasing power parity and exchange rate determination
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The purchasing power parity (PPP) relationship becomes a theory of exchange rate
determination by introducing assumptions about the behavior of importers and exporters in response to changes in the relative costs of national market baskets.
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It measures the work done n
per unit charger.
It is defined as the difference in
electric potential between two points in an electric field,equal to the work
done per unit quantity of charge in moving it from one point to another
in an electrostatic field
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