Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

This question is about Relative Purchasing Power Parity: I am confusing about a sentence: If local currency has higher inflation rate than other major trade

This question is about Relative Purchasing Power Parity:

I am confusing about a sentence: If local currency has higher inflation rate than other major trade partners, but local currency does not depreciate to the same extent (Let's say Inflation rate=4%, but local currency only depreciate for 2%). Then, local goods and services exported will become less competitive.

Why exported goods and services is becoming less competitive?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Foodservice Management Principles and Practices

Authors: June Payne Palacio, Monica Theis

12th edition

133003213, 9780133003215, 978-0135122167

More Books

Students also viewed these Economics questions

Question

issues surrounding the use of criterion significance levels.

Answered: 1 week ago