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The inflation rate is forecast to be 2.5% in Australia and 4.5% in the U.S. The current spot rate AUD/USD is 1.2771.
Problem 1: Ceteris paribus, the supply of USD to shift _______ and the demand for USD to shift ________; hence, the exchange rate will ________.
Group of answer choices
A. rightward; leftward; rise
B. leftward, rightward, rise
C. leftward; rightward; fall
D. rightward; leftward; fall
What impact might this have on your analysis? Support your answer with at least one numerical example
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