Consider a textbook situation in which Australia and the USA are experiencing similar 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?

Question

Quizplus · Accepted Answer

If the rate of inflation decreases significantly in the USA relative to Australia, the purchasing power of the US dollar would increase, leading to higher demand for goods and services from the USA. This would result in an increase in Australian demand for USA goods and services. The options A, C, and D are incorrect as they do not accurately reflect the expected impact of the decrease in the inflation rate in the USA.

Consider a Textbook Situation in Which Australia and the USA