Expected to rise to tzs350 in tanzania

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Two countries, Tanzania and Kenya produce only one good, wheat. Suppose the price of wheat in Tanzania is TZS325 and in Kenya is KES135

- According to the law of one price, what should the TZS/KES spot exchange rate be?

- Suppose the price of wheat over the next year is expected to rise to TZS350 in Tanzania and KES160 in Kenya. What should the one year TZS/KES exchange rate be?

Reference no: EM132506118

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