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. ?
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. ?
Chapter22: International Finance
Section: Chapter Questions
Problem 10QP
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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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