If the Inflation Rate in the United States Is Greater

question 31

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