As the Australian exchange rate ________,the price of Australian imports increases and the quantity supplied of dollars ________.

Question

Quizplus · Accepted Answer

When the Australian exchange rate falls, it means that the Australian dollar has weakened in comparison to other currencies. As a result, the price of Australian imports increases since it now takes more of the stronger currency to buy the same amount of Australian dollars. This would lead to a decrease in the quantity supplied of dollars as investors would be less interested in buying Australian dollars.

As the Australian Exchange Rate ________,The Price of Australian Imports