"A theory of international exchange which holds that the price of similar goods in different countries is the same " is the concept of :

Purchasing power parity

The correct answer is option (3) : Purchasing power parity

Purchasing power parity A theory of international exchange which holds that the price of similar goods in different countries is the same.

Purchasing Power Parity (PPP) is an economic theory and a method used to determine the relative value of different currencies. The core concept of PPP is that in the absence of transportation costs and other frictions, identical goods should have the same price when expressed in a common currency. In other words, the exchange rate between two currencies should adjust over time so that an identical basket of goods has the same cost in both countries, taking into account the exchange rate.