Dude.Dont comment if you dont know subject.And have some respect for teachers.That is why Indian society is going down. Read this model: The purchasing power parity (PPP) theory was developed by Gustav Cassel in 1920 The exchange rate between two curremncies finally land at PPP value.have to there is no other way to rate a currency in terms of other?is it?then give me the way?forget the books and what government says.The excjange rates are manipulated by economists and governments to help one section or to hide fianncial weakness or to have short term gain of currency reserves.But in long run it damages our health.We as country loose by exporting wealth (material,money or manpower cost)at artifically increasing exhange rate.This ofcourse assumes that india for example quotes in dollars and not rupees and is in no psotion to do so.Like today.Why indianexperters cant quote in rupees?They cant as buyer (USA)dominates and has alternatives.
