Suppose Argentina Has a 10% Rate of Inflation, While Inflation

Multiple Choice

Suppose Argentina has a 10% rate of inflation, while inflation is 3% in the United States. If exchange rates do not change

A) U.S. goods will have a disadvantage in the world market compared to Argentina.
B) Argentine goods will become more expensive in the United States.
C) since real exchange rates already take inflation into consideration, the inflation should have no effect on global trade.
D) goods made in Argentina will become cheaper because pesos have lost their value.