Present the Main Theories That Attempt to Explain the Movements

question 4

Essay

Present the main theories that attempt to explain the movements in exchange rates, and discuss the problem of forecasting movements in the value of the AUD.

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Definitions:

Living Standards

Refers to the level of wealth, comfort, material goods available to a person, group, or nation, similar to the standard of living.

Human Capital

The collective skills, knowledge, and other intangible assets of individuals that can be used to create economic value.

Productivity

A measure of the efficiency of production, often calculated as the ratio of output to inputs in the production process.

Standard of Living

The amount of riches, ease, physical items, and basic requirements possessed by a distinct class or region.