Reference no: EM131952581

Assignment: Macroeconomics of Open Economies

Questions:

1. If investors expect an increase in the interest rate paid on US deposits, how the Australian exchange rate will change? Explain.

2. If there is a permanent exogenous decrease in the US money supply, siscuss its short run and long run effects on the US and Australian money markets, and the exchange rate, US$/AU$.

3. On 22nd of March 2018, US Federal Reserve raised interest rate by 0.25%. Correspondingly, however, Australian dollar (AU$) appreciated relative to the US dollar. Search relevant information and use what you have learnt from this unit to explain this AU$ appreciation.

Notes

• Penalties for late submission: The following marking penalties will apply if you submit an assessment task after the due date without an approved extension: 5% will be deducted from available marks for each day up to five days, and work that is submitted more than five days after the due date will not be marked. You will receive 0% for the task. 'Day' means working day for paper submissions and calendar day for electronic submissions. The Unit Chair may refuse to accept a late submission where it is unreasonable or impracticable to assess the task after the due date.

• For more information about academic misconduct, special consideration, extensions, and assessment feedback, please refer to the document Your rights and responsibilities as a student in this Unit in the first folder next to the Unit Guide of the Resources area in the CloudDeakin unit site.

• Building evidence of your experiences, skills and knowledge (Portfolio) - Building a portfolio that evidences your skills, knowledge and experience will provide you with a valuable tool to help you prepare for interviews and to showcase to potential employers. There are a number of tools that you can use to build a portfolio. You are provided with cloud space through OneDrive, or through the Portfolio tool in the Cloud Unit Site, but you can use any storage repository system that you like. Remember that a Portfolio is YOUR tool. You should be able to store your assessment work, reflections, achievements and artefacts in YOUR Portfolio. Once you have completed this assessment piece, add it to your personal Portfolio to use and showcase your learning later, when applying for jobs, or further studies. Curate your work by adding meaningful tags to your artefacts that describe what the artefact represents.