In an ideal world one country's exchange rate versus another would efficiently reflect the difference in Purchasing Power Parity of each country. In reality, this is rarely the case. Explain why not, using real world examples.

What are the two most plausible reasons why countries become international lenders? What two countries fit those plausible reasons ?

After leaving the gold standard system, the exchange rate in terms of gold changed from 100 to 60. Mt textbook expresses it as the reduction in exchange rate. However, I feel that the currency becomes strong given that if I give 60 currencies of a country, I can gain 1 gold instead of 100 currencies. Could you explain what the change from 100 to 6o means?

So, what has happened to the USD-EUR exchange rate over the past year or two?  Can you tell anything about what you would do from looking at the trends?  Has the USD appreciated or depreciated vs. the EUR

Visit one of the many websites that lists all of the current exchange rates between different currencies around the world. Try a financial newspaper’s site such as ft.com (follow the links to “Market Data,” and then “Currencies”), or try websites devoted to foreign exchange market data such as oanda.com or xe.com (dig down; don’t just look at the major currency tables). According to these lists, how many distinct currencies exist around the world today? Are some currencies used in more than one country?  

Why does purchasing-power parity theory NOT hold at all times? Select one: a. because prices are different across countries b. because wages are higher in some countries and lower in others c. because some goods and services cannot be traded d. because countries use different currencies

Description What accounts for differences in living standards between rich and poor countries today. Explain. Describe some differences in purchasing power parity of rich nations and poor countries today. Use actual examples of the purchasing power in comparison countries (rich and poor) to describe. Be specific.

What is the foreign exchange market?  Give examples of those who would be demanders or suppliers of the US dollars in the foreign exchange market.  Discuss what is meant when a currency appreciates (strengthens) or depreciates (weakens), and examples of who would benefit from each situation.

Pick a good that is bought and sold internationally...the only condition is that you can find the price in the United States and the foreign price online (e.g., the iPhone sold in Mexico versus the United States).  Next, find the foreign price, domestic price, and the exchange rate before "testing" the degree to which purchasing power parity holds.    Elaborate upon why PPP might better hold for certain goods for certain countries, but not for others?  In other words, if we observe major departures from PPP, what might be the cause?

Is it fair for China to fix its currency by undervaluing it on the market? How does keeping its currency undervalued give it a favorable position in international trade? What about from the viewpoints of international companies and consumers?