Purchasing Power Parity

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…money should purchase the same amount everywhere does have validity. Any of us who have traveled between countries knows that some goods are more expensive, and some are less expensive in other countries. When we factor in all the variables discussed above, this begins to make sense. It is not logical to pay $1 to ship something from Haiti to America if the price differential is only $0.50. This also obviously does not constitute an arbitrage opportunity.