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Suppose the price of the pair of headphones in the United States was actually $ 8 7 . 0 7 . Assuming no transaction costs,

Suppose the price of the pair of headphones in the United States was actually $

87.07 .

Assuming no transaction costs, transportation costs, or import

restrictions, what does PPP predict would happen to the demand for the pair of headphones in the United States?

The demand for the pair of headphones would increase in the United States.

The demand for the pair of headphones would decrease in the United States.

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