Expected inflation rate in Australia is expected to be 4% in 12 months, and 1% in the U.S. during the same time period. According to the relative purchasing-power parity theory, the Australian dollar would be expected to: Remain unchanged against the U.S. dollar Depreciate by 1 percent against the U.S. dollar Depreciate by 3 percent against the U.S. dollar Appreciate by 4 percent against the U.S. dollar Appreciate by 3 percent against the U.S. dollar