If the UK Experiences Inflation Rates Higher Than in Other

Multiple Choice

If the UK experiences inflation rates higher than in other European countries, the effect will be to:

A) decrease the UK demand for imports.
B) increase the demand for UK exports.
C) shift the UK's demand for foreign currency in the foreign exchange market to the right and cause the pound to depreciate.
D) shift the UK's demand for foreign currency in the foreign exchange market to the left and cause the pound to appreciate.