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THEORIES IN INTERNATIONAL FINANCE. 32. THERE ARE 2 POPULAR FORMS OF PPP THEORY, ABSOLUTE FORM AN THE RELATIVE FORM OF PPP. 33. THE ABSOLUTE FORM

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THEORIES IN INTERNATIONAL FINANCE. 32. THERE ARE 2 POPULAR FORMS OF PPP THEORY, ABSOLUTE FORM AN THE RELATIVE FORM OF PPP. 33. THE ABSOLUTE FORM ACOUNTS FOR SUCH MARKET IMPERFECTION AS COUNTRY SPECIFIC TRANSPORTATION COSTS AND TAXES. 34..RELATIVE FORM OF PPP STATES IN THE ABSENCE OF INTERNATIONA BARRIERS, CONSUMERS WILL SHIFT THEIR DEMAND TO WHEREVER PRICES ARE LOWEST. 35. PPP THEORY PRESUMES THAT EXCHANGE RATE MOVEMENTS ARE DRIVEN COMPLETELY BY THE INFLATION DIFFERENTIALS BETWEEN 2 NATIONS. 36. DEVIATIONS FROM PPP EXIST

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