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Australian businesses export to Canada - HSC - SSCE Business Studies - Question 18 - 2018 - Paper 1
Question 18
Australian businesses export to Canada. What would happen if the value of the Australian dollar increased compared to the Canadian dollar? A. There would be no eff... show full transcript
Worked Solution & Example Answer:Australian businesses export to Canada - HSC - SSCE Business Studies - Question 18 - 2018 - Paper 1
Step 1
What would happen if the value of the Australian dollar increased compared to the Canadian dollar?
Answer
When the Australian dollar appreciates relative to the Canadian dollar, this means that it takes fewer Australian dollars to purchase goods priced in Canadian dollars. Therefore, Australian products would become more expensive for Canadian businesses, making option D the correct choice. As a result, Canadian importers would face higher costs when purchasing Australian goods, which could lead to a decrease in demand for those products.