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Your friend says he is going to Hong Kong, and is very excited because “the dollar...

Your friend says he is going to Hong Kong, and is very excited because “the dollar is worth almost 8 times more in Hong Kong than the US” (1USD = 7.75 Hong Kong dollars). His vacation therefore should be “super cheap” and he is planning a major shopping trip. Why is their logic totally incorrect? (Write a minimum of 100 words in your answer)

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As We Know That Exchange Rates Are Determine By The Purchasing Power Party. So 1 USD = 7.75 Hong Kong Dollar Is Determine By The Purchasing Power Parity. So It Is Incorrect to Think That He Get More Money In Hong Kong And Get Rich. Because For Example If He Pays $1 For 1 Kg Rice In US, so He Have To Pay 7.75 Hong Kong Dollar For 1Kg Rice In Hong Kong. So For My Friend Pays Equivalent Amount Of Money In Both Places For Same Good.

So We Assume That PPP Tries to Equal The Purchasing Power of Different Countries. So their logic is totally incorrect That His Vacation Is Super Cheap.

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