ECONOMICS
TECHNOLOGY
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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a decrease in Australia’s inflation rate
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a fall in interest rates in Australia
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an appreciation of the Australian dollar
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a decrease in average weekly earnings in Australia
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Detailed explanation-1: -Typically, the Australian dollar appreciates when prices in global equity markets increase, and depreciates when prices in equity markets decline.
Detailed explanation-2: -An appreciation of the Australian dollar will have the opposite effect – Australian produced goods and services will become more expensive compared to goods and services produced overseas.
Detailed explanation-3: -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.
Detailed explanation-4: -Currency appreciation is an increase in the value of one currency in relation to another currency. Currencies appreciate against each other for a variety of reasons, including government policy, interest rates, trade balances, and business cycles.