Question: Consider the exchange rate between British pounds and U.S. dollars. Assume British inflation rates rise while U.S. inflation rates remain constant. Then (1) The demand

Consider the exchange rate between British pounds and U.S. dollars. Assume British inflation rates rise while U.S. inflation rates remain constant. Then (1) The demand for British pounds ______, shifting the demand curve of British pounds to the ______. (2) The supply for British pounds _______, shifting the supply curve of British pounds to the _______. (3) Consequently, the British pounds ______ against U.S. dollars.

decreases; left; increase, right; depreciate increases; left; decreases, right; depreciate increases; right; decreases, left; appreciate decreases; right; increases, left; appreciate

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