Suppose a Basket of Goods That Costs $400 in the United

Suppose a basket of goods that costs $400 in the United States costs only £200 in Britain and the current exchange rate is $1 per pound.According to the purchasing power parity theory,which of the following statements explains the reason behind a higher equilibrium exchange rate than $1 per pound?

A) The same basket of goods could be purchased in Britain for £200 and sold in the United States for $400,and the $400 could be used to purchase £400 for a £200 profit.
B) The basket of goods could be purchased in Britain for £200 and sold in the United States for $200,and the $200 could be used to buy £200 for a £500 profit.
C) The basket of goods could be purchased in the United States for $400 and sold in Britain for £400,and the £400 could be used to buy $1,400 for a £1,000 profit.
D) The basket of goods could be purchased in the United States for $200 and sold in Britain for £400,and the £400 could be used to buy $800 for a $400 profit.
E) The basket of goods could be purchased in the United States for $200 and sold in Britain for £400,and the £400 could be used to buy $900 for a £500 profit.