Which one of the following conditions is not required for absolute purchasing power parity to exist?

Question

Quizplus · Accepted Answer

Absolute purchasing power parity focuses on the equalization of price levels between two countries, given a stable exchange rate, without considering the equality of spot and forward exchange rates. Spot and forward rates deal with currency markets and hedging against future currency fluctuations, which is not a direct concern of absolute purchasing power parity. The other conditions (A, B, C, D) relate to the absence of factors that could distort price comparisons, such as trade barriers, non-identical goods, transaction costs, and spoilage, which are relevant to achieving absolute purchasing power parity.

Which One of the Following Conditions Is Not Required for Absolute