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How will the Australian dollar exchange rate (foreign currency per AUD) respond to an increase in the preference for imported goods by Australians in the
How will the Australian dollar exchange rate (foreign currency per AUD) respond to an increase in the preference for imported goods by Australians in the Long Run. (ceteris paribus)
- AUD will depreciate against other currencies
- Exchange rates of AUD will be unaffected by changes in the preference for imported goods
- AUD will appreciate against other currencies
- AUD will appreciate in the short run, but not in the long run
- AUD will depreciate in the short run, but not in the long run>
Note my thoughts rest with no 5.
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