The Exchange Rate in 2007 Was R6

question 32

Essay

The exchange rate in 2007 was R6.8344/$.If the cost of living was the same in the United States and South Africa,forecasting that inflation in 2008 would be about 8.5% in South Africa and 3.5% in the United States.Calculate the expected exchange rate at the end of 2008.

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Definitions:

Protective Tariff

A tax imposed on imported goods to shield domestic industries from foreign competition by making imported goods more expensive.

Import Quota

A government-imposed limit on the quantity or value of goods that can be imported into a country, used to protect domestic industries and manage trade balances.

United States

A country located in North America, comprised of 50 states, known for its significant economic, cultural, and political influence globally.

Switzerland

A landlocked country in Central Europe known for its high standard of living, neutrality, and picturesque landscapes.