bank 3011 international currency and banking market

Question 6

Suppose that there is parity between the Australian dollar and the United States dollar. Let x be a positive number and assume that the United States dollar increases by 100x % in Australian dollars.

(a) Calculate the percentage decrease for one Australian dollar in United States dollars in terms of x. Simplify your answer.

(b) Using your answer to (a), if the United States dollar increases by 10% in Australian dollars, calculate the percentage change for one Australian dollar in United States dollars.

Question 7

The Australian dollar was floated by the Australian Government in 1983. Explain, with reasons, whether you expect the value of the Australian dollar to increase or decrease against the United States dollar between the end of August, 2022, and the end of 2022. Pls provided references for me thanks