Why might Purchasing Power Parity fail to explain exchange rate fluctuations for non-tradeable goods?

• A. Non-tradeable goods are not subject to exchange rate fluctuations.
• B. Non-tradeable goods are unaffected by consumer preferences.
• C. Non-tradeable goods cannot be easily bought and sold across borders, leading to price differences that PPP cannot account for.
• D. Non-tradeable goods are always priced the same in every country, making PPP irrelevant.

Answer: (C)