If Inflation in Australia Is Higher Than Inflation in Japan

question 135

Multiple Choice

If inflation in Australia is higher than inflation in Japan, what will happen to the exchange rate between the Australian dollar and the Japanese yen in the long run, ceteris paribus?

• A)The dollar will appreciate against the yen.
• B)The dollar will depreciate against the yen.
• C)The dollar's value relative to the yen will not change.
• D)Both the dollar and the yen will appreciate.

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Definitions:

M'Naghten Rule

A legal standard to determine whether a defendant was insane at the time of committing a crime and is therefore not responsible for their actions.

Insanity

A legal and psychological term referring to severe mental illness to the degree that an individual cannot distinguish reality from fantasy, affecting legal responsibility.

Not Guilty

A legal verdict by which an individual is declared free of the charge of a crime, implying insufficient evidence to prove wrongdoing.

Psychotic Episode

A period of time where an individual experiences a break from reality, often involving hallucinations or delusions.