Suppose that in 2009, the price levels in the United States and Australia were 100. By 2015, the price level in the United States has increased to 150, while the price level in Australia rose to 160. Suppose the exchange rate between two countries was 1USD = 1.2AUD

Note:Please round your answers to 2 decimal places.

a)Find the inflation rate of the United States.

the United States's inflation rate =

0

%

b)Find the inflation rate of Australia.

Australia's inflation rate =

0

%

c)What was the 2009 real exchange rate (from the perspective of Australia)?

2009 real exchange rate =

0

d)What must the new nominal exchange rate have been in 2015 (from the perspective of Australia) if the real exchange rate remained constant?

2015 nominal exchange rate =

0

e)Suppose Australia has a fixed exchange rate system against the American dollar. The initial nominal exchange rate is fixed. As a result, did Australia's real exchange rate appreciate or depreciate?

Real exchange rate will

(Select here)

f)Would you expect Australia's net exports to rise or fall as a result?

Net exports will

(Select here)

g)Is the Australian dollar overvalued or undervalued?

Australian dollar is

(Select here)