I have one question in my mind that can we test the in-app purchase application in Google Apis emulator with different api level?
Any information regarding this will be welcomed.
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You cannot test services like in app billing and LVL on emulators as they lack Google Play, which acts as a middleman between your app and then launch Google servers. Additionally, the accounts you can configure on the emulator are limited in functionality.
See this for details on testing.