At the beginning of the year, the exchange rate between European euro and the U

Economics Mar 13, 2023

At the beginning of the year, the exchange rate between European euro and the U.S. dollar was 1.1 dollar per
euro. Over the year, European inflation was 8 percent and U.S. inflation was 2 percent. Explain what should we
expect to happen to the U.S. dollar relative to European? Provide the intuition.