Trade Interest Rate Differentials -

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2. Understand how the major factors that influence exchange rate movements operate, particularly: a. Relative inflation rates • Of the theories advanced to explain the exchange rate, and changes in the equilibrium rate, the Purchasing Power Parity (PPP) theory is the longest standing. • PPP theory contends that movements in exchange rates will ensure that the cost of identical goods and ...

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Country Wars -Kwaon

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