CHAPTER 19 Long-Term Exchange Rate Movements and Comparative Advantage Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-1 The Law of One Price Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-2 The Law of One Price Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-3 Absolute PPP Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-4 Relative Purchasing Power Parity Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-5 Major Take-Away Point from Relative PPP Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-6 Comparing PPP with an Error Band to Actual Exchange Rates Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-7 Why PPP-Predicted Rates May Be Inaccurate Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-8 Linking PPP to QTM Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-9 Output per Worker per Day in Inland and Outland Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-10 Opportunity Costs for Inland and Outland Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-11 Domestic Opportunity Costs and Range of Possible Trading Ratios Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-12 Cost of High-Tech Products and Clothing Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-13 Cost of High-Tech Products and Clothing Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19-14 Net Exports-to-GDP Ratio versus Unemployment Rate, 2004 and 2005 Source: See Appendix 19-1 for the list of countries and values Copyright© 2008 South-Western/Cengage Learning All rights reserved ... Exhibit 19- 5 Major Take-Away Point from Relative PPP Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19- 6 Comparing PPP with an Error Band to Actual Exchange Rates Copyright©... South-Western/Cengage Learning All rights reserved Exhibit 19- 7 Why PPP-Predicted Rates May Be Inaccurate Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19- 8 Linking PPP to... South-Western/Cengage Learning All rights reserved Exhibit 19- 9 Output per Worker per Day in Inland and Outland Copyright© 2008 South-Western/Cengage Learning All rights reserved Exhibit 19- 10 Opportunity