The Next Questions Refer to the Following

Multiple Choice

The next questions refer to the following.
Suppose prices in the US are twice as high as those in England, but the US interest rate is 4% while the interest rate in England is 8%. No inflation is expected in either country.
-Under these assumptions,the market would be expecting

A) the dollar to depreciate by 4%
B) the dollar to appreciate by 4%
C) the dollar to double in value over the long run
D) the dollar to depreciate by 50%
E) the dollar to appreciate by 32%