"Miguel Cruz" wrote in message
news:vLheb.31084$FH3.9481@nwrddc02.gnilink.net...
> David Eduardo wrote:
> > "Miguel Cruz" wrote:
> >> I think that alone is enough to conclude that the meaning of "best"
you've
> >> inferred is not what he intended. He didn't ask "What countries have
the
> >> most currency units per dollar?"
> >
> > How would you, then, define "best exchange rate."
>
> The one that provided the most advantageous purchasing power ratio.
A common misconception, I am sure. "Best exchange rate" truly means "maximum
number of units of foreign currency for the currnecy I hold."
"Exchange rate " has nothing to do with purchasing power.
>
> > The rate of exchange is simply a math formula. It has nothing to do with
> > purchasing power.
>
> If the rate of exchange were to change, then the PP ratio would also
change
> (at least in the short term), creating a more or less favorable situation
> for the traveler.
Not always. Advantageous changes in exchange are rapidly leveled out by
increases in prices.
>
> > If the poster wanted to know "value" than he should have asked about
value,
> > not the rate of exchange.
>
> That was clearly the poster's question. You are beating him up over
failure
> to use proper jargon, which is ridiculous behavior. This is not an
economics
> class.
That was not clear.
I frequently see tourists, mostly Americans, who believe that, when they get
more units of a foreign currency for each dollar, they are able to buy more
stuff. They mistake the multiple as being an indication of the cost of
living (or traveling).
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