Would someone give me the short version of this basic economics question?

[slang]

Thank you all for your comments and explainations.


A co-worker complained in a conversation a while ago something like..."it's ridiculous that the people in countries other than the US (or other countries with higher valued currency) should have to work such a long period of time to earn the money required to pay for common, low cost items that we here in the US find easily affordable".

Having visited a third world country just recently, I laughed out loud hearing this. Not because I dont have empathy for those people that have to pay those high exchange rates, but for the reality that I've seen the differences between a developed country and an undeveloped one.

Being physically within a system or country allows you to see and understand why the various currencies would be valued differently. In this case though, I was unable to effectively explain why this is true to this person.

Thanks all for your common sensical explainations. Special thanks to TW who has managed to keep the Bush admin out of the comment while giving a pretty good short background on the question. I know this is a hard thing for you to do TW.

Much appreciated.