8. Twenty years ago, a US dollar bought 1.69 Australian dollar; this year, a US dollar...

 

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8. Twenty years ago, a US dollar bought 1.69 Australian dollar; this year, a US dollar buys 1.39 Australian dollar. Given that total inflation over this period was 25 percent in the U.S. and 15 percent in Australia, has it become more expensive or less expensive to travel in Australia? To solve this problem, use the equation for the %, show your work and explain. [10 points] 9. The International Monetary Fund (IMF), an economic and financial world advisor, is concerned about appreciating currencies in developing countries, typically small open economies (SOEs). Assume that US is the large open economy, and that Botswana is the SOE, a sub-Saharan African country. The nominal exchange rate is expressed as US$/Pula, and the prices in US and Botswana are fixed. Answer the questions in the following order. Your explanation must be more comprehensive than that provided by the graph alone. 8. Twenty years ago, a US dollar bought 1.69 Australian dollar; this year, a US dollar buys 1.39 Australian dollar. Given that total inflation over this period was 25 percent in the U.S. and 15 percent in Australia, has it become more expensive or less expensive to travel in Australia? To solve this problem, use the equation for the %, show your work and explain. [10 points] 9. The International Monetary Fund (IMF), an economic and financial world advisor, is concerned about appreciating currencies in developing countries, typically small open economies (SOEs). Assume that US is the large open economy, and that Botswana is the SOE, a sub-Saharan African country. The nominal exchange rate is expressed as US$/Pula, and the prices in US and Botswana are fixed. Answer the questions in the following order. Your explanation must be more comprehensive than that provided by the graph alone.

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