9.(TCOs E andI)Let the exchange rate bedefined as the number of dollars per Brit

9.(TCOs E andI)Let the exchange rate bedefined as the number of dollars per British pound.Assumethere is a relatively lower rate of inflation in U.S.relativeto that of Britain.(a.) (10 points) Would this event cause the demand for the dollarto increase or decrease relative to the demand for thepound?Why?(b.) (10 points) Has the dollar appreciated or depreciated in valuerelative to the pound?(c.) (10 points) Does this change in the value of the dollar makeimports cheaper or more expensive for Americans? Are Americanexports cheaper or more expensive for importers of U.S. goods inGreat Britain?Illustrate by showing the price of aU.S.cell phone in Britainbefore and after the change in theexchange rate.(d.) (10 points) If you had a business exporting goods to Britainand U.S. inflation fell as discussed abovein this examplewould you plan to expand production or cutback?Why?(Points : 40)