"A commodity costs the same regardless of what currency is used to purchase it." This is a statement of:

Question

Quizplus · Accepted Answer

The statement given in the question is a clear representation of absolute purchasing power parity, which states that the exchange rate between two currencies should equal the ratio of the price levels in the two countries. If a commodity costs the same in different currencies, it shows that the exchange rates are appropriately adjusted to maintain absolute purchasing power parity.

"A Commodity Costs the Same Regardless of What Currency Is