If the Rate of Inflation in the United States Is

Multiple Choice

If the rate of inflation in the United States is 4% and the rate of inflation in the United Kingdom is 3%,relative purchasing power would predict that

A) the pound will appreciate relative to the dollar.
B) the pound will depreciate relative to the dollar.
C) both the dollar and the pound will depreciate due to inflation.
D) both the dollar and the pound will appreciate due to inflation.