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A Regression Analysis of the Australian Dollar's Value on the Inflation

question 60

True/False

A regression analysis of the Australian dollar's value on the inflation differential between the United States and Australia produced a coefficient of .8. Thus, for every 1 percent increase in the inflation differential, the Australian dollar is expected to depreciate by .8 percent.


Definitions:

St. Helena

A remote island in the South Atlantic Ocean where Napoleon Bonaparte was exiled and died after his final defeat at the Battle of Waterloo.

Elba

An island in the Mediterranean Sea off the coast of Tuscany, Italy, famous as the first place of exile for Napoleon Bonaparte in 1814.

Continental System

An economic blockade imposed by Napoleon between 1806 and 1814, aiming to weaken Britain by prohibiting European countries from trading with it.

Continental Markets

Markets that are primarily located on the European continent, often used in contrast with the British or other island markets.

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