ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a depreciation of the Australian dollar and a high rate of economic growth in China
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a depreciation of the Australian dollar and a low rate of domestic economic growth
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an appreciation of the Australian dollar and a high rate of domestic economic growth
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an appreciation of the Australian dollar and a high rate of inflation in China
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Detailed explanation-1: -As Asian countries are passing through a commodity intensive stage of economic development, they have helped fuel a mining boom in Australia. As the mining and export industry thrives, the value of the Australian dollar rises.
Detailed explanation-2: -A strengthening U.S. dollar means that it now buys more of the other currency than it did before. A weakening U.S. dollar is the opposite-the U.S. dollar has fallen in value compared to the other currency-resulting in additional U.S dollars being exchanged for the stronger currency.
Detailed explanation-3: -When the value of the Australian dollar increases relative to another currency, it ‘appreciates’. When it decreases in value, it ‘depreciates’.
Detailed explanation-4: -Australia has a floating exchange rate, which means that movements in the Australian dollar exchange rate are determined by the demand for, and supply of, Australian dollars in the foreign exchange market.