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
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 New Zealand goods will rise.
Demand for New Zealand goods will rise.
Demand for Australian goods will rise.
Demand for New Zealand goods will rise.
If the inflation rate in New Zealand rises relative to Australia and Russia, it would likely lead to an increase in the demand for New Zealand goods. This is because higher inflation in New Zealand would lead to higher prices for Australian and Russian goods, making New Zealand goods relatively cheaper and more desirable.