Consider a Textbook Situation in Which Australia and the USA

Multiple Choice

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?

A) The prices of goods and services in USA would increase in USD terms.
B) Australian demand for USA goods and services would increase.
C) There should be a decrease in Australian demand for the US dollar.
D) There would be a decrease in the supply of AUD in the FX markets.