if RBA decreased cash rate
a) exports fall
b) $A depreciate
c) imports rise
d) trade deficit declines
well foreign inflows of savings will decrease thus $A depreciate, but increased economic growth = more imports,
so not a), not b) as it will worsen, i guess financial flows outweight trade flows so you would say b)? as more imports increase supply of $A - depreciate
a) exports fall
b) $A depreciate
c) imports rise
d) trade deficit declines
well foreign inflows of savings will decrease thus $A depreciate, but increased economic growth = more imports,
so not a), not b) as it will worsen, i guess financial flows outweight trade flows so you would say b)? as more imports increase supply of $A - depreciate
