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Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884Macroeconomics 11th Edition by Michael Parkin
Edition 11ISBN: 9780133423884 Exercise 16
Exchange Rate Policy
Aussie Dollar Hit by Interest Rate Talk
The Australian dollar fell against the U.S. dollar to its lowest value in the past two weeks. The CPI inflation rate was reported to be generally as expected but not high enough to justify previous expectations for an aggressive interest rate rise by Australia's central bank next week.
a. What is Australia's exchange rate policyExplain why expectations about the Australian interest rate lowered the value of the Australian dollar against the U.S. dollar.
b. To avoid the fall in the value of the Australian dollar against the U.S. dollar, what action could the central bank of Australia have takenWould such an action signal a change in Australia's exchange rate policy
Aussie Dollar Hit by Interest Rate Talk
The Australian dollar fell against the U.S. dollar to its lowest value in the past two weeks. The CPI inflation rate was reported to be generally as expected but not high enough to justify previous expectations for an aggressive interest rate rise by Australia's central bank next week.
a. What is Australia's exchange rate policyExplain why expectations about the Australian interest rate lowered the value of the Australian dollar against the U.S. dollar.
b. To avoid the fall in the value of the Australian dollar against the U.S. dollar, what action could the central bank of Australia have takenWould such an action signal a change in Australia's exchange rate policy
Explanation
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The Australian dollar fell against U.S d...
Macroeconomics 11th Edition by Michael Parkin
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