If E /lt; E. /$ PPP it implies:

a.

The U.S. dollar is undervalued with respect to the British pound.

b.

The U.S. dollar is overvalued with respect to the British pound.

c.

Goods and services are cheaper in the U.S.

d.

The pound is over valued with respect to the U.S. dollar.

Please answer a-d as correct or incorrect