[jvm]

> In Economy C, the workers who've been paid by the govt can then purchase 5000 Retina Macbook Airs at $1k each

You are assuming transaction costs of 0 for international trade. If transaction costs for international trade are zero, then yes, of course the PPP adjustment would be a non-op. In the real world that we live in, equivalent goods often have very different prices in different countries.

[AmirS2]

Well, in our hyper simplified economy, the macbook airs are produced domestically - it's the only thing produced in fact (apart from ditches I guess)!

[vidarh]

They are three separate economies. If they were not, then the GDP examples makes no sense.