Economics
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Review exercise 3
An increase in world economic growth and income can push up commodity prices (remember primary products are Australia’s major export earner) and the demand for exports. This would mean an increase in the demand for Australian dollar by overseas customers, resulting on upward pressure on the exchange rate.
However, there may also be an increase in economic growth in Australia resulting in an increase in demand for imports and increasing the supply of Australian dollars to the forex markets.
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