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Suppose that the exchange value of the dollar equals two British pounds. If in San Francisco a computer costs $1,000 and in London it costs

Suppose that the exchange value of the dollar equals two British pounds. If in San Francisco a computer costs $1,000 and in London it costs 2,000 pounds, then

a. Purchasing power parity does not prevail.

b. British consumers will buy computers in San Francisco.

c. Americans will buy computers in London.

d. Purchasing power parity prevails.

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