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an increase in the expected inflation rate in the U.S. will increase the budget deficit in the U.S. relative to the budget deficits of foreign

an increase in the expected inflation rate in the U.S. will

increase the budget deficit in the U.S. relative to the budget deficits of foreign governments
cause the U.S. exchange rate to depreciate
reduce the nominal interest rate in the U.S.

cause the U.S. exchange rate to appreciate

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