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.
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.
举一反三
- The exchange rate between dollar and pound change from $2/£1 to<br/>$1/£1 implies( ) A: an appreciation of the dollar B: a<br/>depreciation of the dollar C: a<br/>devaluation of the dollar D: an exchange rate overshooting
- Low real interest rates in the United States tend to: A: Decrease the demand for dollars, causing the dollar to depreciate B: Decrease the demand for dollars, causing the dollar to appreciate C: Increase the demand for dollars, causing the dollar to depreciate D: Increase the demand for dollars, causing the dollar to appreciate
- If over the next year the inflation rate in the euro area is higher than the inflation rate in Japan, then the euro should depreciate relative to the Japanese yen.
- Your U.S firm has an accounts payable denominated in UK pounds due in 6 months. Toprotect yourself against unexpected changes in the dollar/pound exchange rate you shouldbuy a pound put option.
- If the U.S. dollar and British pound have a flexible exchange rate, and the U.S. dollar changes so that one needs more dollars to buy one pound, the currency has A: depreciated. B: appreciated. C: devalued. D: revalued.