Chapter 6 International Trade, Exchange Rates, and ...

Suppose that U.S. and British inflation rates are equal, and $2 exchanges for 1 British pound. Then if U.S. inflation speeds up relative to British inflation, the PPP theory predicts _____ of the dollar, so that the pound will cost _____ than $2. an appreciation, more. an appreciation, less. a depreciation, more. a depreciation, less ................
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