Which one of the following formulas expresses the absolute purchasing power parity relationship between the Canadian dollar and the British pound?

Question

Quizplus · Accepted Answer

Absolute purchasing power parity (PPP) suggests that the price levels in two countries (when expressed in a common currency) should be equal. This means the price of a basket of goods in the UK (P_UK) when converted into Canadian dollars at the spot exchange rate (S), should equal the price of the same basket of goods in Canada (P_CDN). This is what choice C represents.

Which One of the Following Formulas Expresses the Absolute Purchasing