Question: Under purchasing power parity, the future spot exchange rate is a function of the initial spot rate in equilibrium and Which of the following is

Under purchasing power parity, the future spot exchange rate is a function of the initial spot rate in equilibrium and

Which of the following is true regarding purchasing power parity (PPP)?

a. The relative form of PPP accounts for the possibility of market imperfections.
b. The absolute form of PPP suggests that prices of similar products of two different countries should be equal when measured in a common currency.
c. PPP focuses on the exchange rate-inflation relationship.
d. All of these choices are true regarding PPP.

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