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Suppose the inflation rate in the U.S and Australia are expected to be 3% and 5.5%. If the spot rate is AUD 1.331/USD and exchange
Suppose the inflation rate in the U.S and Australia are expected to be 3% and 5.5%. If the spot rate is AUD 1.331/USD and exchange rtae one year late changes to AUD 1.315/USD, what is the real currency value change of the AUD
A. Appreciation by 3.67% B. Appreciation by 1.22% C. Depreciation by 3.67% D. Depreciation by 1.22% E. None of the above
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