n)Match each of the following statements in Column I with the correct answers or statements inColumn Il according to Exchange Rate Determination models. Answer question 24– 28according to the four diagrams below.S(AUD/USD)S(AUD/USD)SS,Diagram ADiagram BS(AUD/USD)S(AUD/USD)S,SoDiagram CDiagram DColumn IColumn IIA. Diagram A62. The Australian cash rate is relatively higher than the UScash rate; hence the US dollar will deprecate in value.B. Diagram B63. The US economic growth rate is relatively higher than theAustralian growth rate; the Australian dollar willappreciate from the current account perspective.C. Diagram CD. Diagram D64. The US economic growth rate is relatively higher than theAustralian growth rate; the US dollar will appreciate fromthe financial account perspective.E. None of the above65. Due to a higher inflation in Australia than the US, theAustralian dollar will depreciate.66. The Australian government imposes tariff on all importsfrom the US, the Australian dollar will appreciate.

Answered: n) Match each of the following…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

n)
Match each of the following statements in Column I with the correct answers or statements in
Column Il according to Exchange Rate Determination models. Answer question 24– 28
according to the four diagrams below.
S(AUD/USD)
S(AUD/USD)
S
S,
Diagram A
Diagram B
S(AUD/USD)
S(AUD/USD)
S,
So
Diagram C
Diagram D
Column I
Column II
A. Diagram A
62. The Australian cash rate is relatively higher than the US
cash rate; hence the US dollar will deprecate in value.
B. Diagram B
63. The US economic growth rate is relatively higher than the
Australian growth rate; the Australian dollar will
appreciate from the current account perspective.
C. Diagram C
D. Diagram D
64. The US economic growth rate is relatively higher than the
Australian growth rate; the US dollar will appreciate from
the financial account perspective.
E. None of the above
65. Due to a higher inflation in Australia than the US, the
Australian dollar will depreciate.
66. The Australian government imposes tariff on all imports
from the US, the Australian dollar will appreciate.

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AUD/USD refers to the relative exchange rate of the United States currency to the 1 dollar of Australia. Appreciation or depreciation of the US dollar will affect the exchange rate in the global market.

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