PQ 22 What is the difference between the real exchange rate and the purchasing power exchange rate?

Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter29: Exchange Rates And International Capital Flows
Section: Chapter Questions
Problem 21RQ: What is the difference between a floating exchange rate, a soft peg, a hard peg, and dollarization?
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PQ 22

What is the difference between the real exchange rate and the purchasing power exchange rate?

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Real Exchange Rate is the calculated as product of nominal exchange rate and ratio of prices of two countries which are engaged in trading. 

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