The law of one price 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 pair of speakers costs 45.87 in England. The spot rate is currently $2.0988 per pound Assuming that PPP holds true, what is the price of the pair of speakers in the United States? O $105.90 O $21.86 O $96.27 O $81.83 0378 8330378 Suppose the price of the pair of speakers in the United States was actually $105.90. Assuming no transaction costs, transportation costs, or import restrictions, what does PPP predict would happen to the demand for the pair of speakers in the United States? O The demand for the pair of speakers would increase in the United States The demand for the pair of speakers would decrease in the United States