Consider a textbook situation in which Australia and the USA are experiencing similarly low rates of inflation. Then if the rate of inflation were to decrease significantly in USA, relative to the Australia, which of the following impacts would be expected to occur?Group of answer choicesAustralian demand for USA goods and services would increase.There should be a decrease in Australian demand for the US dollar.There would be a decrease in the supply of AUD in the FX markets.The prices of goods and services in USA would increase in USD terms. PreviousNext

f the Australian dollar appreciates, the effect of this is likely to be that:Group of answer choicesexports will be more expensiveimport-competing domestic goods will be relatively cheaper‘imported disinflation’ may become a benefitimports will be more expensive‘imported inflation’ may become a problem

Which of the following will cause the Australian dollar (AUD) to appreciate against the US dollar (USD)?An increase in Australian demand for US electronics.Expected depreciation of the Australian dollar against the US dollar amongst currency traders.A decrease in US demand for Australian coal.A decreasing Australian price level.A decrease in the Australian interest rate.

Suppose that the United States is experiencing high inflation relative to China, which has steady growth with a stable price level. Which of the following would occur in the foreign exchange market?Elimination ToolSelect one answerAA depreciation of United States currency.BAn increase in demand for United States currency.CA decrease in demand for China's currency.DA decrease in the supply of United States currency.EAn increase in the supply of China's currency.

Which of the following describes the situation when the domestic inflation rate moves higher against the foreign inflation rate?Group of answer choicesThere will be an increase in the supply of foreign currency.There will be a decrease in the demand for foreign currency.There will be an increase in the demand for foreign goods.The foreign currency will depreciate against the domestic currency.

If inflation in Australia is lower than inflation in other countries, what will be the effect on net exports for Australia, ceteris paribus? a. Net exports will rise as Australian exports increase. b. Net exports will rise as Australian imports decrease. c. Net exports will decrease as Australian imports decrease. d. Net exports will decrease as Australian exports decrease.