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

Question

Quizplus · Accepted Answer

When the inflation rate in the United States is higher than in Britain, it generally means that U.S. goods become relatively more expensive compared to British goods. This leads to a decrease in demand for U.S. dollars to buy U.S. goods and an increase in demand for British pounds to buy British goods, causing the British pound to appreciate against the U.S. dollar.

If the Inflation Rate in the United States Is Greater