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Please, write a discussion post about the Topic/Statement below (500 words) Topic/Statement: Some economists describe the increase in the U.S. money supply as being analogous to giving people more...

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Please, write a discussion post about the Topic/Statement below (500 words)
Topic/Statement:  Some economists describe the increase in the U.S. money supply as being analogous to giving people more money. If the output of goods and services is not growing at a similar rate, inflation will eventually occur. According to PPP Theory, what will happen to the U.S. dollar? Why? Explain your answer in a well-constructed and persuasive manner.
(2 or 3 Citations needed for this discussion post)
Citation sources (Please use any of the below citation sources for the discussion):
Amadeo, K XXXXXXXXXXDollar Decline Versus Dollar Collapse: Why a Dollar Decline Is Inevitable, while a Collapse Is Unimaginable. Retrieved from https:
www.thebalance.com/dollar-decline-or-dollar-collapse XXXXXXXXXX
Hatter, K XXXXXXXXXXWhat Effect Does Inflation Have on the Purchasing Power of a Dollar? Pocket Sense. Retrieved from https:
pocketsense.com/effect-inflation-purchasing-power-dollar-9328.html
McMaken, R XXXXXXXXXXThe Money Supply is Growing at its Fastest Rate in 3 Years. Business Insider. Retrieved from https:
www.businessinsider.com/money-supply-growing-at-fastest-rate-in-3-years-2016-9.
Patterson, R XXXXXXXXXXA Weak Dollar Hurts More Americans Than It Helps. CNBC. Retrieved from https:
www.cnbc.com/2018/01/26/a-weak-dollar-hurts-more-americans-than-it-helps.html
Horne, J XXXXXXXXXXEight conjectures about exchange rates. Journal of Economic Studies, 31(5), XXXXXXXXXXRetrieved from https:
saintleo.idm.oclc.org/login?url=https:
search-proquest-com.saintleo.idm.oclc.org/docview/ XXXXXXXXXX?accountid=4870
Kulkarni, K. G., & Nandakumar, P XXXXXXXXXXShort-run deviations from purchasing power parity (PPP): A case of expectational changes. Journal of Applied Business Research, 8(2), 122. Retrieved from https:
saintleo.idm.oclc.org/login?url=https:
search-proquest-com.saintleo.idm.oclc.org/docview/ XXXXXXXXXX?accountid=4870
Sjölander, P XXXXXXXXXXUnreal exchange rates: A simulation-based approach to adjust misleading PPP estimates. Journal of Economic Studies, 34(3), XXXXXXXXXXdoi:http:
dx.doi.org.saintleo.idm.oclc.org/10.1108/ XXXXXXXXXX
Amadeo, Kimberly. Purchasing Power Parity. About News XXXXXXXXXXhttp:
useconomy.about.com/od/glossary/g/ppp.htm
Answered Same Day Feb 11, 2021

Solution

Arunavo answered on Feb 12 2021
158 Votes
Running Head: INTERNATIONAL ECONOMICS    1
2
INTERNATIONAL ECONOMICS
Purchasing Power Parity
Purchasing power parity (PPP) is an economic term whose purpose is to assess the value of the dollar of one country with respect to another country. Kulakarni and Nandakumar (1992) further explained that PPP is done by visualizing a basket full of goods and then comparing of the cost of each goods in each country is being measured. However, the price of only one group of product cannot be evaluated with respect to different countries. To calculate the PPP theory actually, a wider range of products needs to be taken into consideration.
PPP can moreover be considered as how much the purchasing power is in a country. Few elements such as the inflation can reduce how far from the dollar value from one year to the next year. Amadeo (2018) have further described that the purchasing power of the people will determine the PPP, however the purchasing should be done in more than one country, through which the value of the dollar will be determined.50642
The pairing of PPP is done with GDP where GDP represents the total monetary value of the goods and services...
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