Question on fiat money exchange rates

[inquisitiveteenager]

Murray Rothbard said that exchange rates tend to equal each other in purchasing power which i agree with. it makes sense.

What I don’t get is how do you explain the phenomenon on cheaper prices in different countries?

If 1 dollar can buy you one carrot in the USA and 2 pounds can buy you the same in England then 1 dollar = 2 pounds.

But if the exchange rates always work like this, how does one get a cheaper price in another country fif the purchasing power of money is retained?

[Prashanth_Perumal]

@inquisitiveteenager

But if the exchange rates always work like this, how does one get a cheaper price in another country fif the purchasing power of money is retained?

If there is no disequilibrium, no profits can be made. You’ll essentially be living in an evenly rotating economy. As conditions change, there will be disparitiesin prices and entrepreneurs sense profits.

And never forget the tampering of exchange rates by governments.

[Tex2002ans]

There is also different supply and demand in different regions, and when taking into account different countries, there are different taxes and tariffs on products as well.