Answer: Purchasing Power Parity Theory
Notes: Purchasing power parity (PPP) theory is used to make long-term predictions about exchange rates in a flexible exchange rate system. According to theory, as long as there are no barriers to trade such as tariffs and quotas, exchange rates should eventually be adjusted so that the cost of the same product is the same, whether measured in rupees in India, or in dollars in the US, and so on. Kind, except that the difference in transport.
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