When the Chinese yuan is appreciating against the Australian dollar, if the relative purchasing power parity holds, then this suggests that: Question 4 Answer a. the Australian inflation rate is equal to the Chinese interest rate. b. the Australian inflation rate is higher than the Chinese interest rate. c. the Australian inflation rate is lower than the Chinese inflation rate. d. the Australian inflation rate is higher than the Chinese inflation rate.

According to the purchasing power parity, when the Japanese inflation rate is less than the Australian inflation rate, Japanese prices are:Question 5Answera.rising at the same rate as Australian prices.b.rising more slowly than Australian prices.c.rising faster than Australian prices.d.not rising.

Suppose 4.7 Chinese yuan (¥) trade for one (1) Australian dollar ($), the Australian price level equals $0.9 per good, and the Chinese price level equals ¥2.35 per good.What is the real exchange rate in Chinese goods per Australian good, rounded to two decimal points?a.1.80b.0.90c.1.11d.0.56

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

If 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

On 10 January 2016, you observed the following exchange rates: Canada-Australia: C$1.2 = AU$1 Japan-Australia: 120 yen = AU$1 Mexico-Australia: 8 pesos = AU$1 India-Australia: 45 rupees = AU$1 If the exchange rate on January 10, 2017, is AU$1 = 10 Mexican pesos, then: Question 3 Answer a. the Australian dollar has appreciated 20% against the Mexican pesos. b. the Australian dollar has depreciated 20% against the Mexican pesos. c. the Mexican peso has depreciated 10% against the Australian dollar. d. the Mexican peso has appreciated 10% against the Australian dollar.