If Inflation Is Higher in the United States Than in the United

question 37

Multiple Choice

If inflation is higher in the United States than in the United Kingdom:

• A) the dollar should appreciate to the pound.
• B) the dollar should depreciate to the pound.
• C) real interest rates should be higher in the United States than in the United Kingdom.
• D) the U.S. net exports to the United Kingdom should fall.
• E) pounds will flow to the United States from the United Kingdom.