The law of one price 14 The theory of purchasing power parity (PPP) states that in the long-run exchange rates between two countries adjusts so that the price of an identical good is the same when expressed in the same currency. A scanner costs 65.45 in England. The spot rate is currently $2.0145 per pound. TU2 50378 3330373 Assuming that PPP holds true, what is the price of the scanner in the United States? $38.99 $32.49 O $131.85 $145.04 Suppose the price of the scanner in the United States was actually $145.04. Assuming no transaction costs, transportation costs, or import restrictions, what does PPP predict would happen to the demand for the scanner in the United States? O The demand for the scanner would decrease in the United States. The demand for the scanner would increase in the United States