Explain why relative purchasing power parity may hold when absolute purchasing power parity does not. List four reasons why deviations from PPP might occur; then carefully explain how each causes such...

Explain why relative purchasing power parity may hold when absolute purchasing power parity does not. List four reasons why deviations from PPP might occur; then carefully explain how each causes such deviations. What is the “real exchange rate”? What does the real exchange rate equal if absolute PPP holds?