In an ideal world one country's exchange rate versus another would efficiently reflect the difference in Purchasing Power Parity of each country. In reality, this is rarely the case. Explain why not, using real world examples. https://www.imf.org/external/pubs/ft/fandd/2007/03/basics.htm https://saylordotorg.github.io/text_international-finance-theory-and-policy/s09-04-problems-and-extensions-of-ppp.html