Question
If the inflation rate in New Zealand were to rise relative to the inflation rate in Russia Australia, which of the following correctly explains what would happen to the demand for Australian or New Zealand goods?(1 point)
Responses
Demand for New Zealand goods will rise.
Demand for New Zealand goods will rise.
Inflation in New Zealand will not change the demand for either countries' goods.
Inflation in New Zealand will not change the demand for either countries' goods.
There is no way of gauging the impact of inflation without more details regarding New Zealand's imports and exports.
There is no way of gauging the impact of inflation without more details regarding New Zealand's imports and exports.
Demand for Australian goods will rise.
Responses
Demand for New Zealand goods will rise.
Demand for New Zealand goods will rise.
Inflation in New Zealand will not change the demand for either countries' goods.
Inflation in New Zealand will not change the demand for either countries' goods.
There is no way of gauging the impact of inflation without more details regarding New Zealand's imports and exports.
There is no way of gauging the impact of inflation without more details regarding New Zealand's imports and exports.
Demand for Australian goods will rise.
Answers
GPT-4o mini
If the inflation rate in New Zealand rises relative to the inflation rate in Australia, it would generally make New Zealand goods more expensive compared to Australian goods. As a result, consumers and businesses in New Zealand may start to prefer buying cheaper Australian goods.
Thus, the correct response would be:
**Demand for Australian goods will rise.**
Thus, the correct response would be:
**Demand for Australian goods will rise.**