💱 Part 1: Exchange Rate Calculations

1. Use the exchange rates below to solve these problems:

Exchange Rates: 1 AUD = 0.70 USD | 1 AUD = 0.65 EUR | 1 AUD = 95 JPY

a) You have $100 AUD. How many US dollars can you get?

b) A souvenir costs 50 Euros. How many Australian dollars do you need?

c) You want to buy a toy that costs 2,850 Japanese Yen. What is the cost in Australian dollars?

📈 Part 2: Understanding Inflation

2. Circle the correct definition of inflation:

When money becomes worth more over time

When prices increase and money buys less over time

When exchange rates change daily

When people save more money

3. A movie ticket cost $8 in 2020. With 3% inflation per year, calculate the price in 2023:

4. Fill in the blanks about inflation:

When inflation occurs, the _____________ of goods and services goes up, which means our money has less _____________ power. This affects families because they need _____________ money to buy the same items they bought before.

🌏 Part 3: Real-World Scenarios

5. Your family is planning a trip to Europe. You need to budget $2,000 AUD for spending money. Using the exchange rate 1 AUD = 0.65 EUR, how many Euros will you have?

6. Check all the factors that can affect exchange rates:

Economic conditions in different countries

Political stability

The weather

Interest rates

Your favourite colour

Trade relationships between countries

💭 Part 4: Critical Thinking

7. Match each scenario with its effect:

1. Australian dollar strengthens against USD

2. High inflation in Australia

3. Australian dollar weakens against EUR

A. European holidays become more expensive

B. Groceries cost more than last year

C. American products become cheaper to buy

8. Explain how inflation affects your family's budget. Give two specific examples:

🧮 Part 5: Challenge Problems

9. The exchange rate changes from 1 AUD = 0.70 USD to 1 AUD = 0.75 USD. If you were planning to buy a $140 USD item, how much money (in AUD) would you save with the new exchange rate?

10. A loaf of bread cost $2.50 five years ago. With an average inflation rate of 2.5% per year, what should it cost today? Show your working:

11. List three strategies people can use to manage the changing value of money: