1. The value of the Australian dollar (AS) today is $0.73. Yesterday, the value of the Australian dollar was 50.69. The Australian dollar b y percent. a. depreciated; 5.80 b. depreciated: 4.00 C. appreciated; 5.80 d. appreciated; 4.00 its exchange rate is likely to be to a single large purchase or sale 2. If a currency's spot rate market is transaction. a. liquid; highly sensitive b. illiquid; insensitive c. illiquid; highly sensitive d. None of these are correct. and 3. If a country experiences low inflation relative to the United States, its exports to the United States should there is pressure on its currency's equilibrium value. a. decrease; downward b. decrease; upward c. increase; downward d. increase; upward 4. A large increase in the income level in Mexico along with no growth in the U.S. income level is normally expected to cause (assuming no change in interest rates or other factors) a[n) in Mexican demand for U.S. goods, and the Mexican peso should a. increase; appreciate b. increase; depreciate c. decrease; depreciate d. decrease; appreciate the U.S. demand for euros and 5. An increase in U.S. interest rates relative to German interest rates would likely the supply of euros for sale. a. reduce; increase b. increase; reduce c. reduce; reduce d. increase; increase 6. British investors frequently invest in the United States or Italy, depending on the prevailing interest rates. If Italian interest rates suddenly rise high above U.S. rates, the investors will the supply of pounds to be exchanged for d nd thus put pressure on the value of the pound against the U.S. dollar. a. increase; downward b. decrease; upward c. increase; upward