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Suppose the U.S. had an inflation rate of 2.85% this year and the U.K. had an inflation rate of 4.29% and suppose these same inflation rates were expected for next year. According to the relative PPP, what would happen to the British pound next year? The British pound would appreciate against the dollar by 1.44%. The British pound would depreciate against the dollar by 1.44%. The British pound would appreciate against the dollar by 2%. The British pound would depreciate against the dollar by 2%