12. Assume the United States and Australia are trading partners. The Federal Reserve, in trying to combat
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12. Assume the United States and Australia are trading partners. The Federal Reserve, in trying to combat a recession, increases the money supply by purchasing bonds on the open market. How will this affect the price level in the United States and the value of the Australian dollar relative to the United States dollar? U.S. Price Level Australian Dollar (A) Increase Appreciate (B) Increase Depreciate (C) Decrease Appreciate (D) Decrease Depreciate (E) Decrease No change
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