Assuming the value of kina appreciated from A$1=K1.30 to A$1=K1.20. The likely impact on exports to Australia will;

Question

A) be expensive
B)Be cheap
C)Remain unchanged
D)Increase
Which is the correct answer?

Answer 1

When the value of the kina appreciates from A$1 = K1.30 to A$1 = K1.20, it means that the kina has strengthened relative to the Australian dollar. This makes goods priced in kina more expensive for Australian consumers because they now need to spend more Australian dollars to buy the same amount of kina.

As a result, the likely impact on exports to Australia will be:

A) be expensive

Therefore, the correct answer is A) be expensive.