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The current spot exchange rate is USD 0 . 7 / AUD . Which of the following statements is correct? a . If USD's value
The current spot exchange rate is USDAUD Which of the following statements is correct?
a If USD's value decreased by against the AUD, the new exchange rate would be USDAUD
b If Relative Purchasing Power Parity holds, and the expected inflation rates in the US and in Australia are and the exchange should change to USDAUD
c If Absolute Purchasing Power Parity holds and price index in the US is USD then price index in Australia should be AUD
d If the economic uncertainty increases in the US but not in Australia, the AUD would depreciate against USD.
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