1. The article by Vanessa Desloires suggests that the AUD is lower as a result of a more pessimistic outlook for the Chinese economy. What is the most likely explanation?

A. World oil prices have fallen

B. The AUD is a commodity currency, and the demand for input commodities has fallen

C. The Chinese Central Bank has raised interest rates, decreasing Ko to Australia and increasing Ki to China

D. The Chinese Central Bank has lowered interest rates, increasing Ko to Australia and decreasing Ki to China

2. The demand for AUD is generated by:

A. Australian imports of foreign output

B. Foreign imports of Australian output

C. Central bank sales of AUD

D. Australians buying US government bonds

3. The supply of AUD is generated by:

A. Chinese purchases of Australian minerals

B. Dividends paid by US companies to their Australian shareholders

C. Japanese imports of Australian beef

D. Australian purchases of shares in European companies

4. In the AD equation, X is measured by:

A. The total volume or quantity of exports

B. The total value of exports

C. None of the above

D. A and B

5. According to the article by Vanessa Desloires, “The Aussie slid more than 1 per cent against the greenback [USD] on Tuesday night amid tumultuous global markets and a general sell-off in commodity-linked currencies.” Since the AUD has depreciated, foreigners will import, ceteris paribus:

A. A higher value of Australia’s goods and services

B. A lower value of Australia’s goods and services

C. The same value of Australia’s goods and services

D. There is insufficient information to give an answer

Answer rating: 100% (QA)

1 B The AUD is a commodity currency and the demand ... View the full answer