Multiple Choice
At the beginning of 2002 the AUD/USD exchange rate was 1.9585 and the 2002 inflation rates were 3.10% for Australia and 2.33% for the US.
What should the USD/AUD exchange rate have been at the end of 2002, according to PPP theory?
A) AUD/USD 0.5068
B) AUD/USD 1.9439
C) USD/AUD 0.5068
D) None of the given answers
Correct Answer:
Verified
Correct Answer:
Verified
Q2: Expectations affect the exchange rate because:<br>A) arbitrageurs
Q3: If PPP holds precisely, then the real
Q4: At the beginning of 2003 the AUD/USD
Q5: If the foreign currency equivalent of the
Q6: Destabilising speculation occurs when speculators:<br>A) buy high
Q7: Which of the following was NOT a
Q8: An exchange rate is said to follow
Q9: Which of the following was NOT a
Q10: Which of the following conditions is the
Q11: The offer exchange rate is determined by:<br>A)