What are the Limitations of the Purchasing Power Parity?
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What are some limitations to Purchasing Power Parity that may explain differences in exchanges rates?
What is purchasing power parity? Why might exchange rates deviate from purchasing power parity?
Critically discuss in your own words the theory of Purchasing Power Parity (PPP), noting the difference between absolute purchasing power parity, relative purchasing power parity. As part of your discussion state whether PPP is useful in practice and why, drawing on your understanding of the Big Mac Index.