Imagine you're buying a toy from a store far away. Sometimes, the toy is cheaper in that faraway place because it costs less to make there, or the money used there isn't as strong as your money. When you bring the toy home, it might cost more because of how much the two kinds of money are worth compared to each other. This helps explain why some products are so cheap abroad.
Examples
- A chocolate bar costs $2 in Belgium but $4 in America because of exchange rates.
- A pair of shoes is cheaper in Indonesia due to lower wages.
- A phone sold for ¥30,000 in Japan becomes more expensive when converted into US dollars.
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See also
- Why Do We Have Different Kinds of Taxes?
- Why Do Prices Change So Much?
- Why Do We Use Money Instead of Bartering?
- Why Do Prices Go Up So Much When There's a Shortage?
- Why Do We Have Different Kinds of Coins?