Explain implications of deviations - purchasing power parity, Financial Management

Assignment Help:

Explain the implications of the deviations from the purchasing power parity for countries’ competitive positions in the world market.

Answer:  If exchange rate changes satisfy purchasing power parity, competitive positions of countries will stay not affected following exchange rate changes. If not, exchange rate changes will affect relative competitiveness of countries. If a country’s currency understands (depreciates) by more than is warranted by PPP which will hurt (strengthen) the country’s competitive position in the world market.


Related Discussions:- Explain implications of deviations - purchasing power parity

Explain about receivables management, Q. Explain about receivables manageme...

Q. Explain about receivables management? Receivable Management: - The term receivables demote to debt owed to the firm by the customers resulting from sale of goods or else ser

Fixed rate versus floating rate asset backed securities, There are fi...

There are fixed as well as floating rate asset-backed securities. A floating rate asset-backed security is one whose underlying pool consists of loans or receivab

Calculate the maximum price of machine, Silvana Zhang of Sajjad Jafri & Geo...

Silvana Zhang of Sajjad Jafri & Geopeng Li Limited is considering purchasing a new widget making machine. She would like to know the maximum price she should pay for the new machin

What is debentures, Q. What is Debentures? Debentures a debenture is an...

Q. What is Debentures? Debentures a debenture is an instrument issued by the company acknowledge its debts to its holders . it is also an important method of raising long terms

Find the expected dividend - stocks, You are considering the purchase of so...

You are considering the purchase of some shares of PECO Inc. common stock which paid a dividend of $1.50 today. You expect the dividend to grow at the rate of 7% per year for the n

6 KEY STAGES OF INVESTMENT DECISION WITH APPROPRIATE DIAGRAM, 6 KEY STAGES ...

6 KEY STAGES OF INVESTMENT DECISION WITH APPROPRIATE DIAGRAM

Role of securities firms in investment intermediaries, What is the role of ...

What is the role of securities firms in investment intermediaries? Securities firms assist within the trading of existing securities into the secondary markets. The two major c

Prepare a report for the managing director, The Managing Director of your f...

The Managing Director of your firm is thinking aloud about an appropriate gearing level for the company: "The consultants I spoke to yesterday explained that some theorists adva

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd