What Conditions Are Necessary for Absolute Purchasing Power Parity (PPP)to

question 10

Essay

What conditions are necessary for absolute purchasing power parity (PPP)to exist?
Is it realistic to believe PPP can exist within a country let alone across national borders?

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Definitions:

Inventory

The basic substances, products under manufacturing, and completed items that form part of a company's assets, which are available or will soon be available for purchase.

Source of Cash

Any activity or operation within a business that generates cash, including operations, financing, and investing activities.

Accounts Receivable Period

The average number of days that it takes for a company to collect payments owed by its customers after a sale has been made.

Early Payment Discount

An incentive offered by a seller to a buyer for paying a bill before the due date.