What is the purchasing power parity theory of exchange

Can a "good business" be an unethical business?
December 14, 2017
Economics of Environmental Quality
December 14, 2017

Question
What is the “purchasing power parity” theory of exchange rates? If the price of a representative bundle of tradable goods is currently $5000 in the U.S. and 550000 yen in Japan, is the $ undervalued or overvalued when the exchange rate is 90 yen per $?
5b) Why don’t actual exchange rates move to purchasing power parity levels in the short run?