If the Same Basket of Goods Costs $400 in the United

If the same basket of goods costs $400 in the United States and £200 in Britain, then according to the purchasing power parity theory, the _____

A) goods and services must cost half as much in Britain as in the United States.
B) exchange rate should approach $2 per pound.
C) exchange rate should approach $0.50 per pound.
D) goods and services must cost twice as much in Britain as in the United States.
E) reason for the difference in price is a difference in the cost of transportation in the two countries.