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Economic management — Question 20

Original QCE Vault practice · 1 mark

Q20 · Practice questionComplex familiar1 mark

QUESTION 20

Assume a cash-rate increase contributes to an appreciation of the Australian dollar. The exchange-rate channel can reduce inflation because

(A)
all export revenues must rise.
(B)
imported goods become dearer in Australian dollars.
(C)
imported goods become cheaper in Australian dollars.
(D)
domestic demand must increase.
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