Comments on: Why are currency values not the same across the world? http://www.myylt.com/2010/06/02/why-are-currency-values-not-the-same-across-the-world/ Discussion of Forex Trading and Currency Trading Thu, 24 May 2012 02:27:42 +0000 http://wordpress.org/?v=2.3.3 By: I_think$ http://www.myylt.com/2010/06/02/why-are-currency-values-not-the-same-across-the-world/#comment-26254 I_think$ Tue, 30 Nov 1999 00:00:00 +0000 http://www.myylt.com/2010/06/02/why-are-currency-values-not-the-same-across-the-world/#comment-26254 The currency within a country is a uniform translator (medium) of the value of bartered goods. So the value of the currency is a reflection of the wealth in a country, and how people value their goods and services. Because economies have grown (and inflated) at different paces over different periods of time, each country's currency has a different value. The rate and amount of taxes workers have to pay also probably impacts what a business person must charge for his product. Example, a chicken costs less in India than the US, so McDonalds of India sells its chicken McNuggets (pieces) for less than they do in the US. Wages are also lower, so the McDonalds worker in India pays less for the pizza he gets next door. However, the ratio of hours worked to buy a product could be relatively similar from country to country. {Overly simple example: 1 hour wages buys 1 pizza, in every country.} Follow up on the internet: Some guy has developed a world economic index based on the prices of Big Macs (hamburger sandwiches) around the world. {No intent to offend if you don't eat beef.} The currency within a country is a uniform translator (medium) of the value of bartered goods. So the value of the currency is a reflection of the wealth in a country, and how people value their goods and services. Because economies have grown (and inflated) at different paces over different periods of time, each country’s currency has a different value. The rate and amount of taxes workers have to pay also probably impacts what a business person must charge for his product.

Example, a chicken costs less in India than the US, so McDonalds of India sells its chicken McNuggets (pieces) for less than they do in the US. Wages are also lower, so the McDonalds worker in India pays less for the pizza he gets next door. However, the ratio of hours worked to buy a product could be relatively similar from country to country. {Overly simple example: 1 hour wages buys 1 pizza, in every country.}

Follow up on the internet: Some guy has developed a world economic index based on the prices of Big Macs (hamburger sandwiches) around the world. {No intent to offend if you don’t eat beef.}

]]>