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a)The US and the EU are trading partners, and both countries operate floating exchange regimes

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a)The US and the EU are trading partners, and both countries operate floating exchange regimes. Suppose US inflation becomes higher than EU inflation. Discuss how higher relative US inflation rate would impact the euro (EU currency). 
 
b. The US and the Australia are trading partners, and both countries operate floating exchange regimes. Suppose Australia's national income becomes higher than US national income. Discuss how higher relative Australian national income would impact the Australian dollar (AUD).

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