With the Canadian dollar running near parity with the U.S. dollar, currency exchange is presently not a factor.

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Floating exchange rates destabilise trade and investment by wrenching relative prices away from their fundamental values (that is, from the values that would put the corresponding exchange rates at purchasing-power parity).

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EU's figures are in purchasing-power-parity terms, which strip out the effects of exchange-rate fluctuations.

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This law states that if you have the same good in two different locations, and their prices once adjusted for currency exchange rates are different, the market will tend to pull the prices back towards parity.

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Argentina, Latin America's fastest-growing economy last year, has the most rigid exchange-rate system of all, with a currency board that fixes by law the value of the peso at parity with the dollar, and thus limits the money supply to the level of foreign currency reserves.

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