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If Interest Rates in Australia Are High and Australian Inflation

Question 31

Multiple Choice

If interest rates in Australia are high and Australian inflation is expected to be low:


A) foreigners can expect to earn low real returns if they invest in Australia.
B) foreigners can expect to earn between high and low real returns if they invest in Australia.
C) foreigners can expect to earn between high real returns if they invest in Australia.
D) foreigners will not invest in Australia because of the uncertainty.

Correct Answer:

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