Assume exchange rates are flexible.The existence of inflation in a country that is higher than inflation in the rest of the world will tend to

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Higher inflation in a country than the rest of the world means that the country's goods and services become relatively more expensive. This reduces the demand for these goods and services in the international market, leading to a decrease in demand for the country's currency. As a result, there will be an excess supply of the country's currency in the foreign-exchange market, leading to a depreciation of that currency.

Assume Exchange Rates Are Flexible