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

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If the inflation rate in the United States is greater than the inflation rate in Britain, the U.S. goods and services become relatively more expensive, leading to a decrease in demand for them, which causes the value of the U.S. dollar to drop. At the same time, the British goods and services become relatively cheaper, leading to an increase in demand for them, which causes the value of the British pound to rise. Therefore, the British pound will appreciate against the U.S. dollar.

If the Inflation Rate in the United States Is Greater