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The aswers is: This will cause U.S. consumers to <u>increase</u> their imports from New Zealand and New Zealand consumers to <u>reduce</u> their imports from the U.S. According to purchasing power parity (PPP), whis will result in an <u>appreciation</u> of the New Zealand dollar (NZ$).
Explanation:
The inflation rate refers to an overall increase in the Customer Price Index (CPI), a weighted average for different goods. If this the U.S. inflation rate is lower than the New Zealand inflation rate, the U.S. will have the opportunity to import more products and/or goods as they rate means economic certainty, and New Zealand as being more affected, their imports will decrease.
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