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Assume the spot exchange rate is 6.22 Chinese yuan per U.S. dollar. If the inflation rate in China is expected to be double that in

Assume the spot exchange rate is 6.22 Chinese yuan per U.S. dollar. If the inflation rate in China is expected to be double that in the U.S. for the next two years, then the:

A. exchange rate will decrease.

B. exchange rate will double.

C. yuan will appreciate relative to the dollar.

D. yuan will become more valuable.
E.

dollar will strengthen against the yuan.

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