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The US dollar has appreciated against the Australian Dollar by 21% over the past year

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The US dollar has appreciated against the Australian Dollar by 21% over the past year. Over this period inflation in the USA has been 5.3%, and inflation in Australian has been 2%. By approximately how much has the US dollar appreciated (+) or depreciated (-) IN REAL TERMS against the Australian dollar? of Select one: a. 24.996 b. 17.2% C. 30.0% d. 28.9% e. 2196

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Answer:-

d) 28.9%

Explanation:-

Inflation changes is = 2/5.3 = 0.377358

Us dollar appreciated = 21% + (21%×0.377358)

= 21% + 7.9245% = 28.9%