exchange rate mechanism paper
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Title: exchange rate mechanism paper

Essay Details:

Subject: Business
Author: Edward G
Date: January 2, 2011
Level: University
Grade: A
Length: 2 / 586

Essay text:

A country's GDP is originally tallied in its local currency, so any comparison between two countries requires a currency conversion. Comparing real exchange rates does not reflect price differences between companies, so they are considered unrealistic. However, the differences between PPP and real exchange rates can be significant. For example, GDP per capita in China is about US $1,400, while using PPP it is about US $6,200. At the other end of the spectrum, Japan has a nominal GDP per capita of about US $37,600, but its PPP figure is only US $31,400. An information way of measuring the PPP between two currencies is the Big Mac index...

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