From the following situations explain what will happen to the exchange rate and provide reasons why : (a)In the US there is a 6% increase in the money supply through the Federal Reserve buying bonds. (b)The Australian Treasury increased the Government bond rate from 0.5% to 2 % due to increased activity in the Australian economy (c)In Australia the level of GDP increased by 3% through increased productivity
From the following situations explain what will happen to the exchange rate and provide reasons why :
(a)In the US there is a 6% increase in the money supply through the Federal Reserve
buying bonds.
(b)The Australian Treasury increased the Government bond rate from 0.5% to 2 % due to increased
activity in the Australian economy
(c)In Australia the level of
(d)In Australia the current nominal interest rate is 3% and the inflation rate is 1.1% .In the US the nominal interest rate is 2.5% and inflation is 0.3% . What will happen in the two countries?
(e) The Australian Government introduced a stimulus package of $60 million into the Australian
economy.What are the likely implications for the Australian economy and exchange rates?
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