Which of the following conditions are required for absolute purchasing power parity to exist?
I.goods must be identical
II.goods must have equal economic value
III.transaction costs must be zero
IV.there can be no barriers to trade

Question

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Absolute purchasing power parity requires that goods are identical (I), have equal economic value (II), that there are no transaction costs (III), and no barriers to trade (IV) to ensure that the law of one price holds globally.

Which of the Following Conditions Are Required for Absolute Purchasing