Suppose a Basket of Goods Costs $400 in the United

Suppose a basket of goods costs $400 in the United States and £200 in Britain.If the exchange rate is $1 per pound,which of the following statements is true according to the purchasing power parity theory?

A) Purchasing the basket of goods from the U.S.and selling it in Britain will lead to a profit.
B) An increase in the demand for pounds will lead to an increase in the price of pounds.
C) An increase in the demand for dollars will lead to an increase in the price of dollars.
D) An increase in the demand for dollars will lead to a decrease in the price of dollars.
E) An increase in the demand for pounds will lead to a decrease in the price of pounds.