What do you understand by Purchasing Power Parity (PPP) and Interest Rate Parity? Explain the reasons for deviation of these parity conditions.

Purchasing Power Parity (PPP) and Interest Rate Parity (IRP) are essential concepts in International Financial Management that help explain the relationship between exchange rates and other economic variables. Let's delve into each concept and explore the reasons for deviations from these parity conditions.

### Purchasing Power Parity (PPP):

Definition:
Purchasing Power Parity is a theory that suggests that in the long run, exchange rates between two currencies should move towards the rate that equalizes the prices of an identical basket of goods and services in any two countries. In simpler terms, if a good is priced at $10 in the United States and the exchange rate is 1:1 with another country, the same good should be priced at _____ ______ __________ ____ _______.
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