If Inflation Was Lower in the UK Than in France

question 65

Multiple Choice

If inflation was lower in the UK than in France, then under a floating exchange rate, which of the following would be true?

• A) The nominal value of the euro will rise against the pound.
• B) The nominal value of the euro will fall against the pound.
• C) The nominal exchange rate of the euro against the pound will remain constant.
• D) The real exchange rate and the nominal exchange rate will remain constant.

---

Definitions:

Ego Integrity

A concept referring to the late-life crisis stage where a person reflects on their life and can feel either a sense of fulfilment or despair.

Unconscious Desires

Wishes or wants that reside within the unconscious mind, influencing behavior without one's awareness.

Superego

In psychoanalytic theory, the part of a person's mind that acts as a self-critical conscience, reflecting social standards learned from parents and teachers.

Balanced

Having elements in the correct proportions or elements that are equally distributed, leading to stability or harmony.