Review the news article by Vanessa Desloires and answer the following questions.

A. World oil prices have fallen

B. The AUD is a commodity currency, and the demand for input commodities has fallen

C. The Chinese Central Bank has raised interest rates, decreasing Ko to Australia and increasing Ki to China

D. The Chinese Central Bank has lowered interest rates, increasing Ko to Australia and decreasing Ki to China

2. The demand for AUD is generated by:

3. The supply of AUD is generated by:

4. In the AD equation, X is measured by:

5. According to the article by Vanessa Desloires, “The Aussie slid more than 1 per cent against the greenback [USD] on Tuesday night amid tumultuous global markets and a general sell-off in commodity-linked currencies.” Since the AUD has depreciated, foreigners will import, ceteris paribus:

6. Suppose India follows China and accelerates its industrialisation. For India, this will:

7. Suppose India follows China and accelerates its industrialisation. For Australia, this will:

8. Suppose the foreign exchange market is initially in equilibrium. Suppose also that foreigners then increase their demand for Australian goods and services by AUD 100 million (an exogenous change). The final increase in demand for Australian goods and services by foreigners will:

9. If the AUD appreciates, then the value of Australia’s imports will RISE if the price elasticity of demand for Australian goods and services is:

10. According to the article by Vanessa Desloires, Australia’s exchange rate has been affected by a variety of global factors. This is because Australia uses a floating exchange rate. Supposing that Australia enters a recession, Australian interest rates are lowered, so causing Ki into Australia to fall. The AUD exchange rate can assist the Australian economy’s recovery from the recession by: