If the Inflation Rate in the United States Is Greater

question 7

Multiple Choice

If the inflation rate in the United States is greater than the inflation rate in Britain, other things held constant, the British pound will

• A) Appreciate against the U.S. dollar.
• B) Depreciate against the U.S. dollar.
• C) Remain unchanged against the U.S. dollar.
• D) Appreciate against other major currencies.
• E) Appreciate against the dollar and other major currencies.

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Definitions:

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The state of working for oneself as a freelance or the owner of a business rather than for an employer.

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Tangible items that are manufactured or produced for sale.

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