If the U.S. inflation is 2% and the U.K. inflation is 3%, what can you infer from relative purchasing power parity (relative PPP) about the change in the exchange rate between the U.S. dollar and the British pound?

a. the pound depreciates against the dollar by 1%.

b. the pound appreciates against the dollar by 5%.

c. the pound appreciates against the dollar by 1%.

d. the pound depreciates against the dollar by 5%.