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  • 24-05-2024
  • Business
Answered

Suppose that the current spot exchange rate of U.S. dollars for Australian dollars, S_(US$/A$) is 0.8. The price of Australian-produced goods increases by 6% and the U.S. price index increases by 3%. Calculate the new spot exchange rate of U.S. dollars for Australian dollar that should result from the differences in inflation rates.

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