Finance Custom Essay: An increase in the rate of inflation in the United States, versus the rate of inflation in the United Kingdom Essay

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1. An increase in U.S. imports from England will give rise to a supply of British pounds in exchange for U.S. dollars. 2. If all Americans buy Japanese automobiles, the U.S. dollar will appreciate relative to the Japanese yen. 3. British imports of Florida oranges will create a demand for U.S. dollars. 4. A rise in the U.S. stock market, other things being equal, will cause the value of the U.S. dollar to depreciate vis-a-vis the currencies of our major trading partners. 5. An increase in the rate of inflation in the United States, versus the rate of inflation in the United Kingdom, will cause the value of the U.S. dollar to increase versus the value of the British pound. Please thoroughly explain your reasoning for your answers to each of these questions.

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