The exchange rate for the Australian dollar is currently A$1.40. This exchange rate is expected to rise

Question:

The exchange rate for the Australian dollar is currently A$1.40. This exchange rate is expected to rise by 10 percent over the next year.

a. Is the Australian dollar expected to get stronger or weaker?

b. What do you think about the relative inflation rates in the United States and Australia?

c. What do you think about the relative nominal interest rates in the United States and Australia? Relative real rates?

Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...