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5. Suppose the spot exchange rate for the Tanzanian shilling is TSh2500/. The inflation rate in the United Kingdom is 3.5% and it is 8.6%
5. Suppose the spot exchange rate for the Tanzanian shilling is TSh2500/. The inflation rate in the United Kingdom is 3.5% and it is 8.6% in Tanzania. What do you predict the exchange rate will be in 1 year? In 2 years? In 5 years? What relationship are you using?
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