Question
Assume that due to productivity improvements, the supply of Australian products increases relative to European products. Which of the following is correct according to the
Assume that due to productivity improvements, the supply of Australian products increases relative to European products. Which of the following is correct according to the general model of long-run exchange rates? A. The Australian Dollar depreciates against the Euro in nominal terms B. The Australian Dollar appreciates against the Euro in nominal terms C. There is no change in the nominal Dollar/Euro exchange rate D. The Australian Dollar may appreciate or depreciate against the Euro in nominal terms E. The Australian Dollar appreciates against the Euro in real terms
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