If the price level in Japan increases more rapidly than the price level in Britain,we would expect

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If the price level in Japan increases more rapidly than the price level in Britain, it would mean that the demand for Japanese goods and services would decrease, which would lead to a depreciation of the Japanese yen against the British pound. This would make Japanese exports cheaper and British imports more expensive, which would help to rebalance the trade between the two countries. Lower interest rates in Japan are not necessarily related to changes in the relative price levels, and there is no information in the question to indicate anything about changes in productivity between the two countries.

If the Price Level in Japan Increases More Rapidly Than