If at current exchange rates it was cheaper to buy a product in country B than country A, we would expect people to sell country A's currency and buy country B's currency, according to the purchasing power parity theory.

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According to the purchasing power parity theory, if a product is cheaper in country B than country A at current exchange rates, people are expected to sell country A's currency and buy country B's currency. This is because the theory suggests that in the long run, exchange rates will adjust to reflect the relative purchasing power of currencies in different countries.

If at Current Exchange Rates It Was Cheaper to Buy