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exchange rate mechanism paper

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Issue:

Business

 

Written by:

Barbara D

 

Date added:

October 26, 2011

 

Level:

University

 

Grade:

A

 

No of pages / words:

3 / 586

 

Was viewed:

9899 times

 

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Essay content:

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...
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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...
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