relative vs absolute purchasing power?

CFA Level II Economics
#1

I know, and easy concept, but I can’t determine the difference between the two?

Thanks.

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#2

Absolute PPP : The same basket of goods should cost the same everywhere. If a standard basket of goods costs €100.00, and the USD/EUR exchange rate is $1.3158/€, then that standard basket of goods should cost $131.58.

Relative PPP : The exchange rates between currencies should reflect their inflation rates. If the spot USD/EUR exchange rate is $1.3158/€, the (annual) USD inflation rate is 4% and the (annual) EUR inflation rate is 2%, then the expected spot exchange rate in one year should be ($1.3158 × 1.04) / (€1 × 1.02) = $1.3416/€.

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#3

Why does the book allow you to use nominal rates instead of inflation rates to predict exchange rates? not inflation.