# Purchasing Power Parity: Predicting Exchange Rates Essay Sample For College

The most popular method of forecasting exchange rates is called the theory of purchasing power parity (PPP). The PPP principle is based on the theoretical “law of one price”, according to which identical goods in different countries should have the same price (Jabbie & Jackson, 2020). For example, according to this rule, a pencil in Canada should cost as much as the same pencil in the United States, taking into account the exchange rate and excluding the costs of exchange and transportation. In other words, there should be no reason for speculation when someone buys pencils cheaply in one country in order to sell them profitably in another (Majumder & Ray, 2020).

Based on this PPP theory, the exchange rate should change in such a way as to compensate for price increases due to inflation (Papell & Prodan, 2020). For example, let’s assume that prices in the United States should increase by 4% in the coming five years, while in Canada by only 2%. The inflation differential will be:

4% – 2% = 2%

This means that the rate of price growth in the United States will be faster than those in Canada. According to the principle of purchasing power parity, the US dollar should depreciate by about 2% in order for the prices of goods in the two countries to remain relatively the same. For example, if the exchange rate was 90 US cents per Canadian dollar, then according to the PPP method, the projected rate will be:

(1 + 0.02) x (0.90 US dollars for 1 Canadian dollar) = 0.918 US dollars for 1 Canadian dollar

This means that the Canadian dollar should rise to 91.8 US cents per dollar in a year. In the next year, considering the economic conditions remain the same, we have

• (1 + 0.02) x (0.918 US dollars for 1 Canadian dollar) = 0.936 US dollars for 1 Canadian dollar
• One more year

• (1 + 0.02) x (0.936 US dollars for 1 Canadian dollar) = 0.954 US dollars for 1 Canadian dollar

• Another year

• (1 + 0.02) x (0.954 US dollars for 1 Canadian dollar) = 0.973 US dollars for 1 Canadian dollar

• In five years

• (1 + 0.02) x (0.973 US dollars for 1 Canadian dollar) = 0.992 US dollars for 1 Canadian dollar.

### References

Jabbie, M., & Jackson, E. A. (2020). On the Validity of Purchasing Power Parity: The Case of Sierra Leone 1. Journal of Advanced Studies in Finance, 11(1), 18-27.

Majumder, A., & Ray, R. (2020). National and subnational purchasing power parity: a review. Decision, 47(2), 103-124. Web.

Papell, D. H., & Prodan, R. (2020). Long-run purchasing power parity redux. Journal of International Money and Finance, 109, 102260. Web.

## The Issue Of Poverty In Savannah, Georgia

### Introduction

In my letter, I would like to address a serious issue that, unfortunately, still affects our community of Savannah, Georgia, and in poverty. This problem influences both individuals and society, as it is closely connected with the rise of homelessness, malnutrition, food insecurity, insufficient childcare, lack of access to healthcare, under-resourced institutions, unsafe environment, and others. Further in the letter, the poverty in our city will be elaborated on, and my solution for its elimination will be stated, as well.

### Discussion

According to the provided statistics, approximately 24 percent of the city population is below the poverty line (Savannah’s poverty rate is higher than Georgia’s, nearly double the national average, 2019). The main reason behind the worsening of this tendency is the growing wealth gap, which demonstrates an uneven distribution of resources between national households. Significantly, it is mostly the non-white population, that suffers from the wealth shortage, since one of the causes of the initial wealth gap emergence was former racially discriminatory housing and lending policies. For instance, 69 percent of those with a yearly income lower than \$10000 are represented by people of color, mostly black (Household income in Savannah, Georgia, #10). Moreover, the wealth gap between white Americans and minority Americans is predicted to increase in the future, just like it already did after the Great Recession.

### Conclusion

In my view, to eliminate the issue of poverty in Savannah, we should follow Karl Marx’s philosophy of justice expressed by fairness, which was described in Chapter 9 of “Roots of Wisdom: A Tapestry of Philosophical Traditions” by Mitchel. According to it, manual labor should not be exploited for a minimal wage, instead, the means of production should belong to the workers (Mitchell, 2019). While the poor spend their whole life working, still being unable to escape poverty, the rich become even richer. It is only communism that will allow us to stop alienating people from their work and achieve justice in terms of the obtained wealth of the citizens.

### References

Household income in Savannah, Georgia. (n. d.). Statistical Atlas. Web.

Mitchell, H. B. (2019). Roots of wisdom: A tapestry of philosophical traditions (8th ed.). Cengage Learning.

Savannah’s poverty rate is higher than Georgia’s, nearly double the national average. (2019). WJCL. Web.

## Synthesis On Influence Of Media Societies

The political life of citizens in a democratic nation relies on media services. Media is the origin of universal communication and comes in numerous forms, from the internet to televisions and radios. The media and society field focuses on media’s background, structure, and societal contribution to mass communication: the World Wide Web, motion pictures, and the recording industries. Equally, media refers to the various forms of transmission of information or communication in society. A breakdown of the influence of media society on the public form the basis of this paper.

Consequently, media plays a significant role in the education sector. It educates society by offering comprehensive knowledge on specific topics or events. In Guardians of the Galaxy, a warrior sets off on a journey away from ordinary life. In the realm of the wonders of nature, he encounters supernatural forces and attains a decisive triumph. He then returns to ordinary living but with the ability to grant his fellows boons (Wangler et al. 75). Evidently, the limitations of the adventure compel the protagonist to get out of his laxity. Their victory is manifested through the villains’ defeat and the world’s advancement. The moral lesson of the narrative is how the members of society are subject to getting out of their comfort zones.

Ultimately, the best entertainers are accessed in the mass media. Cat-woman’s Hyde is a beautiful program dominated by comedy. In Ranker’s research, the main characters, Cat-woman and Hulk, are oversimplified therefore reconstructing gender lines in the script. Both ironically manifest heroism and villainess simultaneously (Wangler et al. 175). The two characters play middle roles are they are neither good nor bad. Their powerful and stereotypical nature depicts the comic and entertaining nature of the movie.

Furthermore, media shapes the morality of the citizens in society. Conversely, Batman wholesomely depicts the gap between whites and blacks. He ironically manifests the grey side of society through his superhero narrative (Wangler et al. 87). Batman depicts the current hero deconstructions available in graphic novels and other media channels. The employment of the dark side symbolically exhibits the conflict between evil and good in society in the quest for protecting society. Therefore, the media prescribes the citizens’ approach to morality; society’s code of conduct has been decayed by the current generation, mainly the youth.

To summarize, the emergence of media societies has enabled citizens to acquire information about facts present and their immediate environment. Mostly, information is aired by news broadcast companies such as radio and television industries. The citizens are equipped with up-to-date information regarding various issues, such as their political setting, economic status, and societal life. Mass media report and interpret events to advance opinions regarding an object, personality, or event. Similarly, the acquired information from the media industries contributes to the nation’s development.

### Works Cited

Wangler, Sarah, and Tina Ulrich. “73: Catwoman’s Hyde: A Comparative Reading of the 2002 Catwoman Relaunch and Stevenson’s Novella (SYN).” 88 Open Essays A Reader for Students of Composition Rhetoric, Web.

Wangler, Sarah, and Tina Ulrich. “14: Shadows of the Bat: Constructions of Good and Evil in the Batman Movies of Tim Burton and Christopher Nolan (Born).” 88 Open Essays A Reader for Students of Composition Rhetoric, Web.

Wangler, Sarah, and Tina Ulrich. “88 Open Essays – A Reader for Students of Composition & Rhetoric.” 88 Open Essays A Reader for Students of Composition Rhetoric, Web.

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