If Inflation Increases Substantially in Australia While U

Multiple Choice

If inflation increases substantially in Australia while U.S. inflation remains unchanged, this is expected to place ____ pressure on the value of the Australian dollar with respect to the U.S. dollar.

A) upward
B) downward
C) either upward or downward (depending on the degree of the increase in Australian inflation)
D) none of the above; there will be no impact