ATAR Notes: Forum

VCE Stuff => VCE Business Studies => VCE Subjects + Help => VCE Economics => Topic started by: billz1508 on June 16, 2009, 09:42:58 pm

Title: trouble with appreciation and depreciation factors :S
Post by: billz1508 on June 16, 2009, 09:42:58 pm

trouble with appreciation and depreciation factors

can any one help me out with this.. im doing questions which i have recieved from my tutor, (didnt go through it with him) and it wants me to examine a factor which could contribute to the appreciation or depreciation of the australian dollar.

any help would be helpful :). thankyou

Title: Re: trouble with appreciation and depreciation factors :S
Post by: moshi on June 16, 2009, 10:04:41 pm

An appreciation in the AUD indicates that the market is strong, i.e. AD is high. Exports are a major contributer to movement in the AUD - if demand for our exports are high, then our dollar will likely appreciate, and vice versa.
An example of exports affecting the AUD is the recent lapse in demand for Australian commodities from our major trading partners, like China, which had a major negative impact on our exchange rate. (Note the example's about depreciation)

EDIT: fixed example

Title: Re: trouble with appreciation and depreciation factors :S
Post by: billz1508 on June 17, 2009, 01:26:50 am

Thank you. I had completed question on it, but this just confirmed to me the whole jist/concept of it. Highly appreciated :)

cheers