A basket of goods costs ZMW500 in Zambia while the same basket of goods costs ZAR800 in South Africa. A check at ABSA bank shows that for ZAR1 you need ZMW0.91. Using this information compute the real exchange rate between the rand and the kwacha. Ensure to interpret the meaning of the real exchange rate computed. ?

Principles of Economics 2e
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ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter29: Exchange Rates And International Capital Flows
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Problem 9SCQ: Is a country for which imports and exports comprise a large fraction of the GDP more likely to adopt...
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A basket of goods costs ZMW500 in Zambia while the same basket of goods costs ZAR800 in South Africa. A check at ABSA bank shows that for ZAR1 you need ZMW0.91. Using this information compute the real exchange rate between the rand and the kwacha. Ensure to interpret the meaning of the real exchange rate computed. ?

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